FOLK2FOLK, the UK's largest peer-to-peer business lending platform, said more investors are turning to property-backed opportunities in search of inflation-beating returns.

The company, which has offices in Cheltenham and Cornwall, has facilitated nearly £77 million of cumulative tax-free investment through its Innovative Finance ISA (IFISA).

FOLK2FOLK said this is part of the company's wider lending success, having now deployed over £764 million to support small businesses across regional and rural Britain since 2013.

IFISAs have historically delivered significantly higher returns than traditional cash ISAs. During the 2024/25 tax year, cash ISA transfers accounted for more than 73% of all ISA transfers to the platform. This increase comes amid wider public discussion around cash ISA reform and the growing visibility of alternatives like IFISAs.

So far in the 2025/26 tax year, 100% of ISA transfers to FOLK2FOLK's IFISA have come from cash ISAs.

Roy Warren, managing director of FOLK2FOLK, said: "In a year where investor caution has been high and inflation has eaten away at savings, we've seen more people making an active choice to move away from cash ISAs, seeking opportunities that can outpace inflation and deliver income.

"Our IFISA offers fixed monthly interest, backed by property, and is a clear alternative to leaving cash sitting dormant. And it funnels private capital directly into growing British businesses, which is something the government wants to see."

This pattern reflects issues raised in FOLK2FOLK's recent open letter to the Chancellor, which called for greater awareness of the lesser-known IFISA and its role in encouraging more productive use of tax-free allowances for the benefit of both investors and the UK economy.

In the first month of the 2025/26 tax year, FOLK2FOLK also recorded its strongest monthly level of ISA inflows, receiving more than £4 million in new funds.

While ISA activity traditionally peaks in March, this post-deadline surge suggests momentum is carrying into the new financial year as FOLK2FOLK's IFISA is increasingly seen as a year-round income strategy.

FOLK2FOLK's IFISA enables individuals to lend directly to UK businesses via secured loans backed by land or property. Loans support job creation, diversification, and business growth across regional and rural Britain, a ripple effect the company calls FOLKONOMICS.