New regulated Sharia-compliant product targets faster decisions and higher income multiples
Islamic property finance provider Offa has launched a new regulated home purchase plan (HPP), offering a Sharia-compliant alternative to a residential mortgage with finance offers available in under an hour, subject to credit and risk checks.
The HPP allows a minimum 5% deposit and income multiples of up to seven times, with family members permitted to contribute to payments. A “Family Assist” feature enables relatives to join the finance plan so customers can access more funding while remaining sole legal owners.
The product also supports “gifted equity”, where a buyer acquires a property below market value from family and Offa treats the full market value as the basis for finance, which can remove the need for a cash deposit.
Offa’s structure follows Islamic finance rules that prohibit interest. The HPP uses a co-ownership-with-leasing model: Offa and the customer buy the property together and the customer makes monthly payments to increase their share over time. The firm operates an ethical policy that excludes interest and avoids sectors such as arms, animal testing, gambling, alcohol and tobacco.
“We are revolutionising the cumbersome world of Islamic finance – challenging and beating conventional high street banks on speed while also allowing family members to help with payments,” said Sagheer Malik (pictured top), chief commercial officer and managing director of home finance at Offa.
“For too long, Muslims seeking property finance that adheres to their faith have had to suffer slow finance decisions and mountains of paperwork. All that has changed today, because we are providing a truly modern Sharia-compliant product with a paperless application process and ultra-quick decisions. It will also appeal to non-Muslims who favour ethical finance.”
The Financial Conduct Authority authorised Offa last year to provide HPPs in the UK. The firm, which first brought Sharia-compliant bridging finance to the UK market, has also launched a bridge-to-let product combining its short-term finance with a paperless buy-to-let offering, and recently acquired Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio. Offa now offers a broad range of Islamic property finance options, including residential, buy-to-let and bridging facilities.
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