Shariah Banks Want To Help Expats Buy Property

Expats struggling to find a home or buy to let mortgage in the UK could find a Shariah compliant mortgage may suit their needs.

With a limited pool of lenders cherry picking applicants, picking up a mortgage back in the UK can be a tough ask for many expats.

Most high street banks have dropped out of the market and only a few niche lenders are taking on new business.

That’s where Shariah compliant finance comes in by offering a different way of doing business to British expats.

Not only are some key lenders readily looking to expand their businesses, but they are also offering advantageous terms to expats who could be rejected by other lenders in the sector.

How Shariah finance works

Shariah compliant finance means lenders cannot make money from lending money, so offer shared ownership purchase plans instead of interest-bearing loans.

Basically, the property buyer pays rent to the lender instead of interest based on the share of ownership and gradually buys the property by paying an additional premium over the term of the agreement.

One Shariah compliant lender, Gatehouse Bank has produced two short videos to explain how the deals work in clear terms.

Both are posted on the bank’s web site.

The bank’s chief commercial officer Paul Stockwell explains that Shariah compliant finance is not just for Muslims, but property buyers of any faith.

Benefits for expats

“It is clear from recent research carried out by the bank that we need to work harder to ensure that people understand how Shariah-compliant finance works,” he said.

“We need to provide potential customers with easy-to-understand information about what Shariah-compliant finance is, and the benefits it can offer them.”

Expats could find that Shariah compliant lenders will consider applicants from countries blacklisted by traditional lenders.

They also offer more relaxed lending terms and will look at buyers seeking cheaper properties and who earn lower salaries – often from £25,000 a year.

For buy to let loans, the lenders will also consider funding limited companies, which is another restricted market in the UK.

Besides Gatehouse, Al Rayan is another active Shariah compliant lender in the UK.

Stay Connected

Latest News

Non Resident Landlord Scheme Explained for Expats

The UK Non-Resident Landlord Scheme (NRLS) is the way HM Revenue & Customs collects tax on rents from property owners who spend...

OECD Explained

The Organisation of Economic Co-Operation and Development (OECD) is a forum for the governments of 37 developed countries to discuss economic and...

QROPS List – June 1, 2020

The number of Qualifying Recognised Overseas Pension Scheme (QROPS) across 28 countries has hit 1,917 – with 13 opening during the past...

FATCA List – June 2020

The US Internal Revenue Service’s list of foreign financial institutions (FFI) reporting under the Foreign Account Tax Compliance Act (FATCA) increased by 1,854...

Economic Impact Payments for US Expats

The US government is paying millions of dollars into the bank accounts of American expats as coronavirus economic impact payments and this guide will...

HMRC Explained

HMRC is short for Her Majesty’s Revenue and Customs. The HMRC collects the taxes and customs duties that the British government spends...

LEAVE A REPLY

Please enter your comment!
Please enter your name here