THE HOUSE Crowd has announced that it is now able to accept investments through a self-invested pension plan (SIPP).
The peer-to-peer property lender said in an email update on Wednesday that its development loans, bridging loans and auto-invest products are now eligible to be held within the tax-efficient structure.
“Investing in our products via a self-invested personal pension is a great, tax-efficient way to build for your retirement,” The House Crowd said on its website.
The House Crowd has partnered with specialist pension provider Morgan-Lloyd to provide regulated administration of SIPP investors and their investments.
There is no minimum investment, but fees will be charged by the SIPP provider, so it is probably not worthwhile setting up a SIPP unless you have at least £50,000 to invest, The House Crowd said.
The platform will not deduct any fees from the returns quoted for any investment made through a SIPP, but Morgan-Lloyd will do so directly.
The P2P industry has been relatively slow to tap into the opportunities posed by SIPPS. P2P loans are categorised as a non-standard asset, so some SIPP providers have been reluctant to allow their clients to include them in their SIPPs.
Furthermore, while P2P loans are technically allowed in SIPPs, connected parties rules stipulate that there must be no connection between the lender and borrower. This provides a challenge for SIPP providers if a P2P loan is allocated to a large number of borrowers.
It is not permissible to hold residential property investments within a SIPP. However, with The House Crowd’s offering, the investor is not actually purchasing the property, they are making loans to a third-party developer.
The House Crowd follows Octopus Choice into the SIPP arena. Octopus Choice announced earlier this month that its investments are now SIPP-eligible, following rising demand from investors and financial advisers.