How to Invest Your ISA in Residential Property (Without Becoming a Landlord)

If you’re one of the millions of UK savers looking to make the most of your annual ISA allowance, have you thought about investing in property? There is a third, lesser-known, type of ISA beyond cash and stocks and shares which allows you to invest in property and earn income that is hands-off, tax-free, and without the hassle of becoming a landlord.

Why more people are looking to invest their ISA in property

With cash ISAs facing potential reform or reduction, and stock markets sitting near all-time highs, many savers are looking for a middle ground: a way to earn stable, inflation-proof income, without the volatility of equities or the poor returns of cash.

That’s where property comes in. It’s long been a favourite among UK investors, but until recently, using your ISA to invest in property wasn’t easy.

The problem with traditional property investing through ISAs

While Real Estate Investment Trusts (REITs) and property funds can be held in some stocks and shares ISAs, they carry market risk, often lack the direct, inflation-linked income many investors seek, and have faced significant scandals in recent years. Read our full breakdown of the risks affecting social housing REITs

You also cannot simply buy a rental property inside an ISA. And buy-to-lets are becoming increasingly unattractive with modest returns after costs and taxes, tenant hassles, and a rising tide of regulations including energy rules, tax reporting, compliance costs, and more (read our full breakdown)

So what’s the alternative?

Innovative Finance ISA (IFISA)

There is a way to use your ISA to earn regular income from residential property without becoming a landlord or buying a property outright.It’s called an Innovative Finance ISA (IFISA) and it allows you to hold certain qualifying investments that generate interest (rather than dividends), including those linked to property.

At Housemartin, we’ve made this simple. We allow you to invest your ISA in a portfolio of properties leased to regulated charities and housing associations, often backed by local or central government — through long-term, inflation-linked rental contracts.

Here’s how it works.

What makes this model attractive?

• Long-term, inflation-linked income
  Properties are leased for 5–10 years to housing associations or charities. Rent is typically annually reviewed upwards in line with inflation.
• Rent is paid even if the property is empty
  There are no “void periods” for investors. You receive income regardless of occupant turnover.
• Minimal hassle
  You don’t deal with maintenance, tenants, insurance or tax reporting on the properties. Housemartin handles it all — especially attractive in light of tightening landlord regulations in 2025.
• Social impact
  Your investment helps fund safe, long-term housing for vulnerable individuals via the supported living sector, which is under-supplied and increasingly prioritised by public policy.
• ISA wrapper = no tax
  All your returns are tax-free when held in your IFISA. You can use your £20,000 annual allowance, or transfer in an existing ISA.
• Portfolio diversification
  Property income can provide stability and inflation protection as part of a broader investment strategy. Read more on why diversification into property matters now more than ever.
  

How does this compare to other investment options?

Feature	Housemartin (IFISA)	Cash ISA	Stocks & Shares ISA	Buy-to-Let
Typical return (p.a.)	6-8%	1–4%	4–8% (varies)	3–6% (after costs)
Inflation protection	Yes	No	Mixed	Possibly
Volatility	Low	None	High	Low
Hands-off?	Yes	Yes	Yes	No
Tax-free returns?	Yes	Yes	Yes	No
Positive Social impact	Yes	No	No	No

Why now?

The government is actively reviewing ISA rules and encouraging savers to invest more productively. While Cash ISAs may soon face reforms, IFISAs continue to offer a lesser-known, but powerful, way to put your ISA to work — with long-term, tax-free income and with Housemartin also a significant social benefit.

How to get started

Housemartin makes it simple. You can:

• Open a new IFISA with as little as £1
• Transfer your existing ISA to us
• Choose the properties you want to invest in
  

You stay in control, with full monthly financial reporting and the ability to buy or sell your positions on our secondary market (subject to availability).

Sign up with Housemartin today and explore our IFISA opportunities