Islamic home finance demand accelerates in January 2017
UK’s largest Sharia compliant retail bank sees 228% increase in completions
Following the announcement last month that demand for its home finance products reached an all-time high in 2016, Al Rayan Bank, the UK’s largest Sharia compliant retail bank, has revealed that demand has continued to accelerate in January 2017.
Demand for the Bank’s Home Purchase Plans (HPPs) and Buy to Let Purchase Plans (BTLPPs), as measured by the volume of eligible enquiries to the Bank, was up by 19.5% in January 2017, compared with December 2016 and up by 13.2% compared with January 2016. At the same time the number of HPP and BTLPP completions increased by a staggering 227.6% in January 2017, compared with January 2016
Commenting on the increase in the demand and completions, Keith Leach Al Rayan Bank’s Chief Commercial Officer 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.”
Interest is prohibited in Islam as Muslims believe that it promotes financial unfairness in transactions which ultimately leads to financial unfairness in society. Al Rayan Bank’s HPPs and BTLPPs are, therefore, do not involve interest. Instead the Bank’s customers purchase their properties together with Al Rayan Bank as partners. Over time they acquire the Bank’s share through a monthly acquisition payment, whilst paying rent to use the portion of the house that they do not yet own.
Al Rayan Bank is an Islamic Bank, founded on faith-based, ethical principles that derive from trade, entrepreneurship and risk-sharing, in which the customer and bank work together as partners towards a mutually profitable end. These principles prohibit Al Rayan Bank from investing savers’ deposits in unethical activities such as gambling, pornography, speculation, tobacco, arms and other activities not in keeping with the values of Islam.
Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and is a member of the Financial Services Compensation Scheme.