CapitalRise sees IFISA uptick after Assetz Capital withdrawal
CapitalRise has noted a significant uptick in Innovative Finance ISA (IFISA) transfers, following the withdrawal of Assetz Capital from the market at the end of 2022.
Speaking alongside Goji Investments operations team leader Poppy Barker and Brompton Private Wealth investment consultant Henry Parker, CapitalRise chief executive Uma Rajah said the prime property lender has seen a notable spike in transfer-in volumes over the last six months.
“We’ve seen dramatic growth in ISA volumes, in terms of number of customers, the amount of ISA money we have on the platform,” she said, during a recent CapitalRise-hosted ISA webinar. “ISA transfer-in volumes also have been really strong particularly I’d say in the last six months, we’ve had a couple of months where there have been real spikes in transfer-in volumes.”
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Barker, who is part of the Goji team that handles transfers and KYC for CapitalRise, explained that this has been a trend across a number of ISA providers since the Financial Conduct Authority changed the financial promotion rules for high-risk investments, leaving many lenders unable to market the product to swathes of their investors.
“As a result of that we have seen an uptick in those ISAs being transferred from one provider to another,” Barker said. “So, the market is kind of swings and roundabouts really, if one ISA provider offboards, then we do tend to see an uptick in other ISA providers.
“It’s been in the news recently that Assets Capital have decided to close their ISA pretty quickly as well. So that would be the uptick in transfers in that we’ve seen to CapitalRise recently.”
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Rajah commented on the rising interest rates attached to ISAs. Citing recent Peer2Peer Finance News research, she said: “they were looking at the target returns across, I think it’s over 40 IFISA providers, and they were saying it was on average, around 8.8 per cent per annum was the average of all those platforms that they looked at, and that was up from 7.5 per cent [sic 7.75 per cent] when they did the same exercise a year before.”
Rajah was asked by an investor during the closing Q&A how CapitalRise reduced the risk of losses on the platform.
“We make sure that we lend at very conservative loan-to-value ratios,” she said. “On average, our loan-to-value ratio across all of the different loans we’ve done to-date is around 63 per cent which gives us a 37 per cent buffer, if you like, in terms of the safety buffer on all of the loans that we do.”
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