Goji, a specialist investment portal for the P2P lending space, has joined forces with fully authorised peer-to-peer platforms Landbay,UK Bond Network,Downing Crowd and Peer Funding. Each of these outfits is licensed to offer Innovative Finance ISA products to investors, sheltering them from income tax on returns.
Landbay’s peer-to-peer model focuses on buy-to-let mortgages, while the recently launched Peer Funding specialises in SME loans. Downing and UK Bond Network are bond-based platforms. Debt securities of the kind offered by these firms were ushered into the realm of the IFISA in August of last year.
Goji has agreed deals to build and integrate the administrative back-end of each of these platforms’ IFISA offerings, speeding them on towards launch. The urgency is that investors only have until April 5th to invest this tax year’s ISA allowance, via P2P channels or otherwise.
“The IFISA is a fantastic opportunity for current and future investors to place a tax-free wrapper over their peer-to-peer investments with Landbay and other fully regulated businesses,” said Landbay COO Julian Cork, adding that his firm is on track to launch its property-backed ISA before the tax year is up.
Goji CEO Jake Wombwell-Povey anticipates a marked growth in P2P demand as a direct result of the IFISA in 2017. “With the end of the tax year approaching, we’re readying our customers for the surge in demand predicted by industry experts,” he said, citing a Morgan Stanley report.
But the anticipated surge in demand for P2P investments may not materialise if the very largest platforms continue to be held back by the regulator. Zopa,Funding Circle and RateSetter – by a stretch the peer-to-peer industry’s largest players – continue to operate under interim permissions. They must obtain full authorisation from the regulator prior to offering IFISA products to their now-sizable investor bases. Asset allocation methods, the use of institutional funding and the pre-funding of loans are just a handful of the things that could be behind the deadlock.
There are currently ten fully authorised peer-to-peer lenders on the market (to our knowledge).
Another potentially significant development on the horizon for these platforms is the raising of the ISA allowance. “Given current figures, it is easy to see why many thousands more investors will choose to invest in the IFISA before the April deadline,” said Wombwell-Povey. “Then of course things will get really exciting with the new £20,000pa ISA threshold kicking in from April 2017.”