New ISA supports vital housing projects

An ISA which allows investors to support home building projects for vulnerable people in the UK has been launched.

The new innovative finance ISA (IFISA), the latest offering from ethical lending platform JustUs, offers a tax free return of 6.5% and flexible transfers.

Meanwhile, the money invested is used to finance the renovation and development of new homes for people with learning disabilities or for those who require round-the-clock care.

IFISAs are a tax-free savings product where, instead of money being invested as cash or in stocks and shares, it is used in peer-to-peer lending. This involves the money being lent to a borrower, who repays the loan.

The JustUs IFISA pays interest whilst providing a bridging loan to accredited developers for up to 70% of the open market value or purchase price – whichever is lower.

Accredited developers will then renovate the property with guidance from occupational therapists before the council or housing association agrees long term leases. The property acquisition will then be completed by long-term financial institutions and JustUs lenders will be repaid in full.

Lee Birkett, founder and chief executive of JustUs, said the ISA offered consumers the chance to enjoy saving and investing in a product which would make a difference to people’s lives.

He added: “In the UK, there is a housing crisis and this is even more critical for those in a vulnerable position – requiring round-the-clock care or specially adapted homes.

“Over the next 24 months we’re aiming to fund 100 properties on the platform. Local government institutions have already been contracted to lease these properties once they are developed in conjunction with occupational therapists and the families involved.

“This project will transform the lives of many and we’re incredibly proud to be involved.”

The IFISA pays monthly interest with no fees and loans are covered by a first legal charge over the security of the properties. JustUs cash is ring-fenced by Barclays Bank.

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