EVER since the launch of the IFISA in April 2016, peer-to-peer platforms have been trying to out-do each other in a race to grab the biggest market share.
Two years later, investors have a wealth of options to choose from. IFISAs now come in all shapes and sizes, from low-risk, high-reward offerings, to asset-backed securities, bond programmes, SME growth investing, and – of course – P2P property IFISAs.
There are now dozens of platforms which specialise in P2P property lending, and most are now offering highly competitive IFISA rates to discerning investors.
But how do these P2P property returns stack up against non-property IFISAs? Read on to find out which IFISA is best if you want to build up your P2P investment portfolio.
The case for…P2P property IFISAs
P2P property IFISAs offer some of the highest returns on the market – made all the more lucrative when wrapped within an IFISA. Double-digit returns are practically the norm when it comes to P2P property investing. The likes of CapitalRise and FundingSecure have returned up to 14 per cent in the past, while Proplend and LandlordInvest have both targeted gains of up to 12 per cent for their investors.
These returns become even more appealing when the investor is able to see the bricks and mortar property that they are investing in. In fact, many platforms post the address of each property on their website, so would-be investors can conduct their own due diligence on the area and owner before they invest (or at least check out the neighbourhood on Google Earth).
What’s more, British retail investors are comfortable with property investing. There is a long history of home ownership and buy-to-let investment in the UK, which makes the idea of investing through a P2P platform feel familiar, even to investors who are new to the world of P2P. By investing in P2P properties, they can essentially own a share of a property for as little as £10, without the stress of landlord-related bureaucracy. In a country where property is seen as the ultimate investment, this is an incredibly tempting proposition.
The case for…P2P non-property IFISAs
Non-property IFISAs have also shown that they are able to offer chart-topping returns for their investments. Eco-friendly lender Abundance was one of the first platforms to win IFISA approval, and it has been offering a steady stream of double-digit loans to its investors ever since. The platform has been able to offer investors access to returns of between six and 15 per cent through its IFISA, with a minimum investment of just £5.
Similarly, HNW Lending has made returns of up to 15 per cent for its IFISA customers, by offering loans on a variety of valuable assets, including fine wine collections, art and pension funds.
Clearly, double-digit returns are not isolated to the P2P property sector, and in some cases the non-property platforms will offer greater diversification.
There are also platforms that span both property lending and other types of finance, such as Ablrate and Assetz Capital, which also lend to businesses, and offer returns of up to 16 per cent within the IFISA wrapper.
With a variety of property and non-property IFISAs on the market, it’s up to investors to do their research and decide which will make their money work the hardest.