Property bonds, also known as property investment bonds, are a way for property companies and property developers to raise money from investors in the form of a loan. For experienced investors, property bonds are an alternative investment product that has the potential to provide attractive returns uncorrelated to traditional equity and bond markets.
In some cases property bonds can be held in an IFISA, which means any potential returns are tax free.
The IFISA was introduced in 2016 and has grown in popularity with over £1 billion invested to date. The UK government recognised the importance of the alternative finance sector, in particular peer-to-peer (P2P) lending, and introduced the IFISA to enable investors to enjoy tax free returns from P2P loans, mini bonds and property bonds.
There are multiple other ways you can invest into fixed term property bonds outside of an IFISA, including direct investment, or possibly through your SIPP or SSAS. All property bond providers will have their own rules, so check the ways you’re eligible to invest on a provider-to-provider basis.
You're also able to invest in property bonds through a Limited Company, however you will not benefit from the same tax reliefs as are available when investing via an IFISA, SIPP or SSAS.
Property bonds are most suitable for experienced investors (sophisticated, high-net-worth, professional) who understand the risks involved, and are happy to take those risks in the search of higher returns than can generally be offered by more mainstream investment routes (such as the Cash ISA).
MAVEN Bonds are an IFISA provider specialising in fixed term property bonds.
Against a backdrop of low interest rates and a volatile stock market, the IFISA can provide an attractive investment opportunity for experienced investors.
With the ability to hold peer-to-peer loans and debt-based securities, IFISA investments have the potential to generate higher rates of return than more traditional investment routes for investors with a greater appetite for risk.
To find out more, download our free IFISA guide.