P2P property lender Relendex launches IFISA

The platform joins a handful of other peer-to-peer lenders authorised to offer the Innovative Finance Individual Savings Account.

The platform joins a handful of other peer-to-peer lenders authorised to offer the Innovative Finance Individual Savings Account.

The number of P2P platforms offering an Innovative Finance ISA is growing, with commercial real estate platform Relendex set to launch it own tax-wrapped investment product.

The IFISA was started by former Chancellor George Osborne in 2016 and allows individuals to include income from P2P platforms as part of the current £20,000 tax-free allowance.

Around 27 firms have been authorised to offer the IFISA, including Zopa, one of the largest platforms in the UK. Zopa was the first of the “big three” P2P platforms to get authorised. One of the other bigger platforms, Funding Circle, was also authorised today. The other big player, RaterSetter has not yet been given authorization from the Financial Conduct Authority, which regulates P2P lenders.

The product will work similarly to Relendex’s other accounts, with lenders choosing which loans to invest in. The loans are secured against commercial real estate property in the UK.

“Many people have built up a significant nest-egg in their tax-free ISA but in the low-interest environment Cash ISAs are only earning around 0.5 per cent per annum and Stocks and Share ISAs are potentially quite volatile and therefore investors’ capital is at risk,” said Michael Lynn, founder and CEO of Relendex.

“A secured lending P2P ISA is the best of both worlds...Of course property values can fall, but since our average Loan-to-Value is around 60 per cent, the property concerned would need to fall 40 per cent on average before any loss would result.”

The firm’s IFISA is non-flexible, which means that any investment during a tax year count towards the allowance for that year and cannot be replaced. This allows Relendex to offer the ISA fee free, Lynn said.

“Our lenders see us as a longer term investment, although we do provide a secondary market if they decide to sell on early,” he said.

The company, launched in 2013, said its loans have had no defaults and have maintained an average yield of 8.78 per cent per year.