Demand for UK property from Sharia-conscious investors continued to soar last month, fresh figures show.
Al Rayan Bank, the wholly Sharia-compliant retail bank, said that there was a 228% surge in home finance - home purchase plan (HPP) and buy-to-let purchase plan (BTLPP) - completions in January compared with the same month in 2016, reflecting general growth in consumer applications for Islamic finance in this country.
The surge follows a 9% rise in applications to the bank in 2016, marking a 99% increase over the past five years.
As an Islamic bank Al Rayan Bank does not use any interest-bearing products to finance customers’ properties, but rather uses the savings deposits from its customers, managed in accordance with ethical, Sharia principles.
Buy-to-let landlords turning to Al Rayan Bank for finance will acquire property in the Islamic finance principle of co-ownership (Musharaka), purchasing the property together with the Bank, as partners, rather than in the form of a loan which is repayable with interest.
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.”