Analysts believe that 2018 will be the year Peer-to-peer (P2P) comes of age as the major platforms gear up to launch their new innovative finance ISA’s (IFISA) in the new year. According to data from research provider Intelligent Partnership, P2P consumer lending platforms said they expected the new products to boost their annual lending volumes by 26 per cent.
Expecting a stampede for the new products, many platforms are limiting the availability of the IFISA products to their existing lenders in batches. Those who have used the platform for the longest and who lend most frequently will be offered first chance to apply. Commenting on the new product launch one of the largest platforms said it is expecting to raise “hundreds of millions of pounds on the back of the IFISA launch, eventually rising to billions in the long term”.
Since the government first announced the tax-free shelter in the 2014 budget, the industry has been slow to roll out the IFISA. According to the FT, of the 61 providers that HM Revenue & Customs has so far authorised, less than half have launched a regulated product. HMRC data released in August shows that investors opened 2,000 IFISA accounts in the 2016/17 tax year, sheltering a total of £17 million in the tax wrapper.
Some platforms have been asking lenders to register for the new product for several months and will drip feed lenders into the IFISA so that they can control and match demand with borrowers. Several platforms have been closed to new money for many months with Zopa claiming to have a waiting list of more than 15,000 investors in October. It says more than 80 per cent of its customers expressed an interest in opening an IFISA and more than half of its new investments have been raised through the tax-efficient vehicle since it launched.