Ratesetter Launches IFISA Offer

Ratesetter announced it will launch the IFISA product offer tomorrow. The Ratesetter ISA will initially be available to existing customers, then to new customers on 1 March and to inward transfers from other ISAs in April.

Key features of the Ratesetter ISA:

  • Average interest rates are 3% to 6% p.a. depending on level of access.
  • Ratesetter says it takes less than five minutes to open a Ratesetter account online.
  • All investors are automatically covered by Ratesetter’s Provision Fund which manages and diversifies risk, meaning investors do not need to choose specific loans. The Provision Fund has ensured that, to date, every individual Ratesetter investor has received their capital and interest in full. Lending on Ratesetter is an investment and capital is at risk.
  • The Ratesetter ISA is a flexible ISA. Investors can withdraw money and replace it later in the same tax year without losing their tax-free allowance.

Ratesetter’s CEO and founder, Rhydian Lewis OBE, told P2P-Banking:

‘RateSetter’s purpose is to give people the opportunity to earn more on their money. Our ISA makes that opportunity even more compelling because investing is now tax-free.

 Cash ISA savers are frustrated with low interest rates, while inflation is always nibbling away at their money. Stocks & Shares ISA investors have enjoyed good returns recently but may be nervous of market falls, as demonstrated in the last few days. Lending is a third asset class in the middle, offering the potential for higher returns than cash without the volatility of shares.

 With RateSetter’s excellent track record and our focus on the retail investor, we believe our ISA will become an attractive home for people looking to put their money to work.’

For more Innovative Finance ISA products see the large P2P-Banking IFISA comparison table.

Assetz Capital IFISA Launches

Assetz Capital has launched the IFISA offer allowing UK taxpayers to use the 20,000 GBP tax-free allowance while investing on the p2p lending platform.

New and existing Assetz Capital investors can open an IFISA wrapper on the platform and then invest into any automated Assetz investment account in December. The IFISA is also set to include the popular Manual Loan Investment Account (MLIA) in the New Year.
The IFISA is flexible and offers investments into p2p lons with interest rates ranging from 3.75% to 12%.
 
Stuart Law, CEO at Assetz Capital said: “Our IFISA …[is] great new tax-free investment choice for those that are new to peer-to-peer lending, but we also feel strongly about delivering a product that caters for our thousands of long-standing investors who prefer to choose their own loan investments within the Manual Loan Investment Account. That’s why we were determined to ensure that the MLIA will be allowed in our IFISA shortly after launch. … We will also shortly be releasing a queuing system in case we have excess demand for the IFISA that will allow our existing and faithful investors priority access to the tax free returns.”
Stuart Law gave P2P-Banking an informative interview in November.
The Assetz Capital IFISA offer has been added to the P2P-Banking IFISA comparison table today.

Proplend IFISA Offer Launches Next Week

proplend logoProperty based p2p lending marketplace Proplend will launch its IFISA offer on May 30th at 9am. Initially the IFISA product will only be made available to those existing investors that had signed up to Proplend until May 26th. The new IFISA investors will have the same choice of loans secured by income producing UK commercial property and the same 1,000 GBP minimum investment opportunities as non-ISA investors. Depending on selected tranche, which differ by LTV, the interest rates range from 6.3% to 9.3%. The Proplend IF ISA will be flexible and allow tranfers in and out.

Since launching in 2014 Proplend has facilitated 11.7 million GBP in loans and has experienced no defaults so far.

There are currently 19 providers listed on the P2P-Banking IFISA comparison table.

Zopa To Retire Safeguard Fund

P2P lending marketplace Zopa announed the plan to roll out the new IF ISA from June 15th to existing customers with target rates of up to 6.1% and also that from December 2017 new lending will not be subject to the Safeguard Fund.

Investors in Zopa Core will lend in the same risk markets as Access and Classic (A*-C) but will not be covered by the Safeguard fund. Zopa Core will offer a higher target return of 3.9% after fees and expected credit losses, as compared to 3.7% and 2.9% for Classic and Access.

The Classic and Access product offers will no longer be available for new customers, but existing customers can continue to lend through these products until 1st December, when they will be retired.

The Innovative Finance ISA (IFISA) will be launched in four phases:
1. The first stage (from 15th June) will be focused on existing customers who want to open a new IFISA (limit of 20,000 GBP) and lend through Core and Plus.
2. The second stage (1st July 2017 to 31st July 2017) will enable existing customers to sell their current loans and re-purchase similar loans in an IFISA wrapper. This will allow investors to retain Safeguarded loans in the IFISA. Any investing through new lending, or relending as capital is returned, will be onto Plus or Core only.
3. The third stage (from August 2017, but dependent on meeting demand for new IFISAs) will allow existing customers to transfer existing ISA investments with other providers to Zopa.
4. And finally, once we have met demands of existing customers, we will welcome investments from new customers.

From December 2017, new lending will not be subject to Safeguard. All loans that currently have this coverage will continue to receive it.

Zopa today says it initially introduced Safeguard in 2013 to deal with a tax anomaly that unfairly penalised peer-to-peer lenders. The fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers: and not bad debt. In 2015 the tax laws were updated enabling investors to claim for relief on losses from bad debt. As a result, the primary reason for Safeguard was removed.
However in 2013 the Zopa website claim differed: ‘Zopa has created the Safeguard in order for you to get back all your money plus interest – without having to worry about a borrower paying you back. The Zopa Safeguard was created to step in and give you back all the money owed to you.’

Last year, based on customer demand, the company introduced Zopa Plus product without Safeguard coverage. Plus has proven popular and since March 2017 Zopa have been operating a waiting list for new investors due to the very high levels of demand. Zopa says that retiring Safeguard will allow the platform to provide greater target returns than Access or Classic (2.9% and 3.7% respectively, versus 3.9% in Core and 6.1% in Plus).

Andrew Lawson, Zopa’s Chief Product Officer, said: “We’re proud of our 12-year track record of prudent lending and have always provided positive returns to our customers. Safeguard was introduced in 2013 to deal with a tax anomaly that had led to peer-to-peer lenders being unfairly penalised. Since winning our campaign to change the tax rules, we no longer need Safeguard – as customers have proved by flocking to Zopa Plus. Now it’s done its job, retiring Safeguard, allows us to provide greater expected returns to our investors (because on average we over-fund Safeguard) whilst making the investor products even easier to understand. We’ll continue to maintain Safeguard for the rest of its life, and continue to build on our reputation for world-leading credit risk management.”

Relendex launches its Innovative Finance ISA

P2P lending platform Relendex today launches its Innovative Finance ISA (IFISA). Relendex is fully-authorised by the Financial Conduct Authority (FCA).  The UK Government introduced the IFISA in April 2016 and was created to sit alongside existing Cash, Stocks & Shares and Lifetime ISA products.

The Relendex ISA will work in a similar way to its regular accounts.  Lenders will decide which loans to invest in and can build their own diversified portfolio of loans. Through this IFISA, lenders will enjoy tax-free returns on loans secured against UK property.

The Relendex IFISA product has been added to the P2P-Banking ISIFA comparison database today.

Michael Lynn, founder and CEO of Relendex explains why the Relendex IFISA is a viable alternative to other ISA products on the market: “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% pa and Stocks & Share ISAs are potentially quite volatile and therefore investors’ capital is at risk.  A secured lending P2P ISA is the best of both worlds.  The yield is good at between 6 and 10% pa, tax-free and there is considerable capital protection in the form of security over independently-valued UK property assets.  Of course property values can fall, but since our average Loan-to-Value is around 60%, the property concerned would need to fall 40% on average before any loss would result.

So if ISA investors are thinking of using this year’s Annual ISA Allowance or transferring existing ISA funds to a Relendex IFISA Account, they can build a diversified portfolio of good quality loans and achieve a good yield.  They can also reinvest the gross interest, to achieve compound growth and build their capital.”

The Relendex ISA is a non-flexible ISA. This means that all new subscriptions made during a tax year will count towards your subscription limit for such tax Year and cannot be replaced. Michael Lynn, explains:

“Our lenders see us as a longer term investment, although we do provide a secondary market if they decide to sell on early.  A non-flexible ISA recognises this longer-term demand and allows us to offer the ISA without any fees. Also, ISA holders are responsible for adhering to the HMRC annual ISA Allowance, so we track their subscriptions so they don’t inadvertently exceed their annual allowance with us.”

While there is an annual limit for new ISA subscriptions of £20,000 (for 2017-18 tax year), there is no maximum statutory limit to the amount that exitsing ISA money can be transferred across to a Relendex IFISA account (although we set a £10,000 minimum transfer value).  Transferring ISA investors will need to complete a Transfer Authority Form.  There is no need to get in contact with your existing ISA Manager as the Relendex specialist team will handle the entire process for you.”

Asked by P2P-Banking.com about the sales expectations regarding the IFISA product Lynn replied: ‘We will be disappointed if we don’t bring in at least 1 million GBP in the first month subject to how fast transfer-ins of existing ISAs will flow through from ceding managers.  Longer term it’s difficult to put a hard number on it but our conservative target is at least 10 to 15 million GBP in the first year.

Further questiones whether he expects deposits to come mainly using this tax year’s allowance or rather as transfers from amounts from the previous years, Lynn answered ‘The high base of existing ISAs (with over £200 billion sitting in Cash ISAs alone) strongly favours transfers.   But we also expect all transferring holders to utilise their current year annual allowance.’.

P2P-Banking also asked: ‘Should investors consider moving money from an S&S ISA to the Relendex IFISA?’. Lynn said: ‘We are not in the position to advise on individual portfolio allocations but do believe that we offer an attractive product on a risk/return basis.  Obviously secured lending at relatively conservative Loan to Value and diversification does provide a good degree of capital protection for investors and a good yield. The good news is that S&S ISAs and IFISA are not mutually exclusive, so investors may consider allocating to both.’

To date Relendex states it has experienced no defaults and has maintained an average yield of 8.78% pa.

 

Interview with Filip Karadaghi, Managing Director of LandlordInvest

What is LandlordInvest about?

LandlordInvest is a UK-based peer-to-peer lending platform for residential and commercial mortgages. We launched in December last year after becoming fully FCA authorised. In January this year, we made bit of P2P history as we launched the first residential mortgage backed Innovative Finance ISA, ahead of major players such as LendInvest and Funding Circle.

What are the three main advantages for investors?

  1. Security – we believe that loans should be asset-backed as it creates a form of security for investors if a borrower defaults. I personally would not invest in unsecured loans given the risks and the potentially very lengthy enforcement process to reclaim part of the capital, if any at all.
  2. Returns – We offer returns of up to 12%, although we recently funded a loan with a rate of 19% to investors. The loan was arranged with a trusted bridging lending partner and is secured over a flat in Chelsea, one of London’s most prestigious areas.
  3. Diversification – We offer investors the possibility to invest in both relatively low-risk buy-to-let mortgages and more risky bridging loans. Investors can build their portfolio according to their risk appetite and other considerations.

What are the three main advantages for borrowers?

  1. Manual underwriting – we are more pragmatic in our underwriting than most high-street lenders and assess each loan on its merits. For us, the most important part of our assessment is that the borrower has a verifiable track-record and that the security is enforceable in the event of the default.
  2. Speed – we recently assessed a loan, had it fully funded and completed in two days. It was for a borrower that was let down by his exiting lender for an obscure reason at the last minute and approached us.
  3. Online application with a simple online control panel – A borrower may apply for a loan through a simple online form and keep track of the status of their application, loan schedule, loan payments in a easy to use control panel.

What ROI can investors expect?

We aim to offer returns between 5-12% per annum, depending on the product.

You recently launched an IFISA product. How has the investor uptake been so far and was it a big advantage to be in the forefront of approved providers?

The demand for our IFISA has been good. IFISA account holders, although only around 20% of the total registered investors, account for 50% of all funds on the platform. As such, IFISA account holders usually deposit more than non-IFISA account holders and also invest more.

I believe that the main advantage of being one of the first platforms able to offer the IFISA is that we have managed to establish a presence in the industry. If it was not for the IFISA, we would probably be less known than we currently are, given our relatively recent launch.

It remains to be seen what happens when the major players are able to offer the IFISA, but I believe it will be a benefit for us as it will make the IFISA a more mainstream product, benefiting everyone in the P2P industry.

Is the technical platform self-developed?

Filip KaradaghiA prototype of the platform was developed overseas, but the final platform in use today was developed in-house by our tech team, led by our co-founder and CTO Joe Vallender. We continue to make all further developments in house, and are releasing new features regularly.

What was the biggest challenge in launching LandlordInvest and what have been challenges since?

The biggest challenge has been operating under a “real” P2P model, i.e. no pre-funding of loans. As we were one of the first platforms operating under this model, some investors did not fully understand how it works, as many were used to the pre-funding model operated by many players within our niche. One of the drawbacks with a “real” P2P model is that a loan does not start to accrue interest until a loan is complete. This means that there is a certain cash drag. However, one of the benefits with a “real” P2P model is that lenders lend directly to the borrower(s) and the servicing fee charged by us is usually lower than what platforms that operate a pre-funding model charge. This means that we pass on more interest to the lenders.

How is the company financed? What background does your team have?

LandlordInvest was initially entirely financed by the founding team and have recently raised financing from business angels. We’re currently in discussion with several private and intuitional investors to raise another round, which will help us to further ramp up our capacity.

Which marketing channels do you use to attract investors and borrowers?

We use a multichannel approach including, establishing good relations with the press, having an interactive presence on various forums and blogs, affiliate marketing programs and social media presence.

We still believe that the best marketing is doing what we set out to do as the best marketing channel is always word-of-mouth. If we are able to satisfy the platform investors, then there is a high chance that they might recommend us to someone else.

Is LandlordInvest open to international investors?

LandlordInvest does accept overseas residents, subject to KYC and AML checks.

However, it is a requirement that investors must have a UK bank or building society account to be able to invest on our platform.

I hear you are planning a secondary market? Will that work with premium and discounts or at par? What other features do you plan to roll out this year?

We are indeed developing a secondary market and expect to launch it in the beginning of May this year. Investors will only be able to sell loan or loan parts at par. Investors will also be able to sell parts of loans.

We are always developing the platform as we want to deliver the best experience investors can have when investing our platform.

We welcome feedback from investors and have implemented a number of features following direct conversations with investors, and will continue to do so.

Where do you see LandlordInvest in 3 years?

We have established ourselves as one of the leading platforms within our niche and delivering good risk adjusted returns to the platform investors. This has also been our aim since we founded the company and we will do our utmost to reach that aim.

P2P-Banking.com thanks Filip Karadaghi for the interview.

P2P-Banking Launches Database to Enable Investors to Compare IFISA Providers Easily

P2P-Banking launches a new IFISA database, that enables investors an easy comparison of offers by IFISA providers. UK taxpayers can invest up to 20,000 GBP per year tax-free in ISAs. This amount is per tax year, so a person could invest 20,000 GBP this tax year and invest 20,000 GBP in a different ISA next year. The Innovative Finance ISA, short IFISA, was introduced in 2016 with most offers becoming approved by HRMC only in the 2017/2018 tax year.

The new database of IFISA offers allows speedy selection and sorting to review IFISA products by different providers and then links to the provider’s website for in detail information. Investors can filter by interest rate, term, loan type, minimum investment amount, possibility of transfers in and out, flexible IFISA, bonus & cashback promotions and several other criteria. The  comparison focusses on IFISAs by p2p lending marketplaces but also lists IFISAs investing in crowd bonds and other investment types. Currently more than 15 IFISA providers are listed and P2P-Banking will list new offers as they are approved by HRMC and launched in order to help investors get the best IFISA rates that match their investment strategy and risk appetite.

Several companies have reported huge demand in their new IFISA offers. Lending Works reported a huge spike in investor deposits after launch and last week the consumer loans marketplace said, it has recorded £8.8m of subscriptions into its IFISA in the first 3 months with 815 investors lending. CapitalRise has stated earlier this month that the IFISA product raised 900,000 GBP in the first 4 weeks. Crowd2Fund, said that 95 per cent of its investments are now made through the tax free wrapper. CEO Chris Hancock said the platform is experiencing 50 per cent month-on-month growth and is expecting to originate 2 million GBP in loans in April. ‘Last week, 58 IFISAs were opened from 115 investor registrations,’ he said. ‘I think the IFISA market has grown three-fold in terms of investor demand over the past year.’

More p2p lending marketplaces have gained FCA approval recently and are preparing to go live with IFISA offers in the next weeks. Readers of P2P-Banking can subscribe to the free notification service and receive an email whenever the database is updated and a new provider is added.

P2P Lending Marketplace Relendex Receives Full FCA Authorisation

Relendex logoP2P lending marketplace Relendex, which does commercial real estate lending directly connecting creditworthy borrowers to investors, has full authorisation from the Financial Conduct Authority (FCA). The regulation will allow Relendex to launch its new Innovative Finance ISA giving retail investors  tax efficient lending to the U.K. commercial property market. Founder and Chief Executive Officer of Relendex Michael Lynn, said:

“FCA full authorisation marks a fantastic start to 2017 for the Relendex team and platform which will further encourage and facilitate investment in commercial property from both our UK and foreign investors. The appetite for P2P marketplace lending in the property sector continues to grow at an incredible rate with the advances in technology resulting in further market share being taken from the high street banks. Receiving full authorisation will further accelerate this growth and demonstrates that Relendex’s robust operational infrastructure has met with the highest standards demanded by the FCA, bringing increased transparency and confidence to our customers. Relendex, an early mover in security-backed commercial property lending for investors, specialises in innovative finance through its nimble P2P marketplace lending platform technology and ultimately improves accessibility of established and secure asset classes into the direct retail and institutional investor market. The … approach and automated secondary market provides much needed liquidity to lenders.”

Relendex says it has sustained zero defaults on its loan book to date.

Obtaining ISA manager status on the back of this full FCA approval is the next step for Relendex allowing them to be one of the first movers in offering the Innovative Finance ISA to retail investors – the tax free wrapper and P2P investments that is forecast to propel the industry into the mainstream.

Moneything Gains Full FCA Authorisation

Moneything logoMoneything announced  today that have been fully authorised by the Financial Conduct Authority (FCA).

Moneything see this as a significant milestone for our business and the result of just over 18 months’ work that involved the scrutiny of every aspect of our business.

In the announcement Moneything says

Many platforms in the P2P industry are working hard to gain their full permissions and we are one of the first few platforms to be granted full authorisation, ahead of some of the largest P2P companies.

This will help to give our lenders and borrowers confidence that we meet high standards in the way we operate, based on the regulations set by the FCA.

We have had some extraordinary assistance along this journey from our compliance consultants and our legal advisors who have helped us to navigate the complex regulatory landscape. We would like to thank them and the MoneyThing team who have all contributed to our authorisation.

There will be a few changes as a result of our authorisation. Significantly, we are no longer able to pre-fund loans and we will be introducing new lender terms for new loans. A full update on the changes and how they will affect lenders will be provided shortly.

Now we are authorised we can look towards launching an IFISA offering to lenders. This will be subject to HMRC approval and we will release further information in the coming months.

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Landbay Launches IF ISA Offer Today

Today secured by property p2p lending marketplace Landbay launches its Innovative Finance ISA (IFISA). The IF ISA offer carries an interest rate of 3,69%. The minimum investment amount for this product offer at Landbay is 5,000 GBP. There is no account opening fees, no ongoing fees and no transfer-in fee. There is a 50 GBP transfer-out fee.

Investors can make use of the current annual tax‐free ISA allowance of 15,240 GBP. In the next tax year the allowance will rise to 20,000 GBP.