AS THE countdown to the deadline for using this year’s tax-free investment allowance has ticked away, new Innovative Finance ISAs (IFISA) have continued to launch on the market.
March saw the introduction of tax wrappers from peer-to-peer property platforms The House Crowd and Safe as Houses, while EasyMoney, part of Sir Stelios Haji-Ioannou’s easy family of brands, launched its second IFISA offering.
The tax year ends on 5 April so here is what you need to know about the latest products on the market if you still need to make the most of this year’s £20,000 allowance.
Safe as Houses
The Safe As Houses ISA, which invests in loans made to Safe as Houses Group to develop, regenerate and sell on distressed properties, offers investors a return of six per cent.
IFISA returns are generated from the profits made on the purchase, refurbishment and sale of specific classes of carefully vetted property valued by RICS-qualified surveyors, the company said.
The IFISA has a five-year term and requires a minimum investment of £5,000.
Safe As Houses Group is an appointed representative of Gallium Fund Solutions, which is authorised by the Financial Conduct Authority.
The House Crowd
The House Crowd’s IFISA invests in secured P2P loans and property development investments and offers a target return of seven per cent.
The firm says it spreads capital over “a diverse portfolio of property loans as far as practicable”.
However, users cannot manually select their loans for the IFISA and the money is locked up for a minimum of three years before they can withdraw their funds, and a three-month notice period must be given to withdraw or transfer money.
The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio.
Investors will get a fixed return paid in twice a year in October and April.
The latest IFISA to hit the market before the deadline came from EasyMoney, offering target returns of 7.28 per cent. This eclipses the 4.03 per cent returns offered by its first product that launched in February.
The P2P lending platform said its new ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, limited to 75 per cent loan-to-value (LTV).
Its original ‘conservative’ IFISA, which offers lower returns, limits its loans to 65 per cent LTV.
The other key difference is the minimum investment required for both products. Investors need to put at least £20,000 into the ‘balanced’ IFISA, compared to £1,000 for the ‘conservative’ IFISA.