The chance to achieve returns north of 10 per cent by acquiring or developing property holds a clear allure for income-starved investors. Unsurprisingly, the peer-to-peer (P2P) lending platforms putting forward such a proposition have enjoyed a surge in investment over the past three years.
P2P property platforms, which match investors with individuals looking to fund the acquisition or development of a range of property types, proliferated in the wake of the financial crisis as traditional banks tightened their lending criteria and shied away from riskier borrowers. Meanwhile, investors were given an added incentive in 2016 when the government launched the Innovative Finance Isa, which allows individuals to use some – or all – of their annual individual savings account (Isa) investment allowance to lend funds through the P2P lending market.