Propio Investment Platform Launches Property-Only IFISA
Property investment platform Propio.com has launched its first ISA product – an Innovative Finance ISA (IFISA) that invests only in property-backed loans.
‘The Property ISA’ will target tax-free returns of up to seven per cent per year by spreading investor money across a range of property-backed loans in the UK.
Investors can choose from three different ISA-eligible loan portfolios depending on their risk appetite: cautious, balanced or adventurous.
There is a minimum investment threshold of £100, and up to £20,000 can be added in every tax year.
“Unlike buy-to-let, with Propio you’re not actually buying property but investing into a loan secured against it – a bit like a mortgage but over much shorter time scales,” explained Propio co-founder Tom Buttress. “This means that you’re less exposed to the fluctuations of the property market, making it a way of gaining access to the asset class without all the risks and hassle of ownership.”
Buttress added that the Propio IFISA has been created to offer an alternative to low-paying cash ISAs and unpredictable stocks and shares ISAs.
“People are sick of earning peanuts on cash ISAs,” he said. “IFISAs like ours offer the potential for better returns by opening up access to alternative asset classes. Some people are scared by the volatility of stocks, and while investing in small-cap companies can generate strong returns, property is largely seen as more defensive and lower risk, because investments can be backed by real assets.
“Our Property ISA is designed to sit in between cash and equities, offering better returns than a basic savings ISAs but without the unpredictability of equities.”
All of the money raised through the Property ISA will be used to provide loans to property professionals so that they can build and refurbish properties for resale. Propio’s in-house team of property experts and underwriters will carefully vet every loan before it goes live, and each loan will be secured against the market value of the property in question.
“We know that traditional property investing requires time, money and patience, making it inaccessible to most people,” said Buttress. “So, we’ve come up with a smarter way for everyday people to access better, more stable property returns whether you’re on the bus, in the gym or at the beach. One that works for a new generation of investors and helps build much needed homes for people in the UK at the same time.”
Updated: Thursday, January 9th, 2020