FutureBricks will launch an Innovative Finance ISA (IFISA) in the next two months as it sees confidence return to retail investors.
The IFISA will work the same as the property peer-to-peer lending platform’s standard investment opportunities, but held in a tax-free wrapper.
Arya Taware, founder and managing director of FutureBricks, said that the platform is waiting on permissions from HMRC and already has 100 of its investors on a waiting list to use the IFISA.
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“Retail investors are coming back into the marketplace,” Taware said.
“A lot of people unfortunately lost their jobs due to Covid-19 but there are other groups in the economy with disposable savings looking for avenues to invest in.
“They know cash ISAs are not currently a great option with the Bank of England rate so low and stocks and shares are unreliable and volatile, so people want IFISAs especially after Covid-19, and we’ve seen good demand for the our IFISA.”
Similarly, after seeing demand for pension investing through the platform, FutureBricks is also planning on launching a self-invested personal pension and small self-administered pension scheme around the same time.
“We have many investors who are aged 50 plus, including lots of consultants and doctors, who have been requesting it,” Taware said.
Taware added that FutureBricks has received a huge influx of enquiries during the pandemic because other lenders have paused their lending or tightened their criteria.
Meanwhile, on the investor side, the platform has seen more interest from its institutions, which has made up for increased caution among retail investors.
“Our institutional investors weren’t panicking while many retail investors wanted to wait and see what would happen, but they are now returning,” Taware said.
“I think the key is not to panic and to keep in mind property is a longer form of investment where values go up over time. I think that’s why our institutional investors were fine.”
During the lockdown, the lender communicated with its existing borrowers, continued lending after dropping its loan-to-value to 60 per cent and gross development value to 65 per cent and added new solicitors and valuers to its panels.
Taware said even through construction sites were allowed to be open during the lockdown, there was a lack of supply of materials because of panic buying from the bigger sites.
“I think it will slowly return to normal,” she said.
“Property prices will fall in short-term but in six months’ time they may be back to where they were.
“It goes back to demand and supply. We’ve had a supply issue of not enough homes being built for so long, so we won’t see a drastic drop in house prices, but other asset classes will have to be more careful.”