Keith Leach

Sharia-compliant bank posts 228% surge in home finance completions

Islamic home finance completions have more than trebled in January, Al Rayan Bank has revealed.

The bank reported a 227.6% rise in home purchase plan (HPP) and buy-to-let purchase plan (BTLPP) completions last month compared with January 2016.

This growth was accompanied by a 13.2% rise in the volume of eligible enquiries to the bank over the same period and follows news that applications for the two home finance products had reached an all-time high in 2016.

Keith Leach, chief commercial officer at Al Rayan, said: “The UK market for Sharia-compliant home finance continues to be buoyant and – as these impressive enquiry and completion figures show – it is growing at a rapid pace in 2017.

“Over the last year, Al Rayan Bank has reduced the rental rates on its home finance products to make them more affordable than ever before, at the same time we have improved internal processes to speed up customers’ waiting times from offer to completion.

“These factors – combined with increasing acceptance of Islamic banking as a parallel form of banking in the UK – have helped drive the recent growth in demand.”

Al Rayan Bank’s HPP and BTLPP do not involve interest.

Instead, customers purchase their properties together with Al Rayan as partners and acquire the bank’s share through a monthly payment, while paying rent on the portion of the house they do not yet own.

Earlier this year, Al Rayan Bank announced the launch of a Sharia-compliant BTL range in Scotland.

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