{"id":6028867,"date":"2020-01-28T13:15:26","date_gmt":"2020-01-28T13:15:26","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6028867"},"modified":"2023-11-06T12:50:59","modified_gmt":"2023-11-06T11:50:59","slug":"lack-of-awareness-behind-low-demand-for-sharia-compliant-mortgages","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2020\/01\/28\/lack-of-awareness-behind-low-demand-for-sharia-compliant-mortgages\/","title":{"rendered":"Lack of awareness behind low demand for Sharia-compliant mortgages"},"content":{"rendered":"

Specialist Sharia Islamic mortgages are available with certain lenders, and while take-up is currently low, this could improve if brokers change tack.<\/strong><\/p>\n

While brokers strive to offer Sharia-compliant mortgages, Lilla Dilliway, mortgage and protection adviser at BlueWing Financials, suggests that the low demand is because applicable borrowers are unaware that a Sharia-compliant mortgage is a possibility, especially in the UK.<\/p>\n

A poll by Mortgage Solutions to establish how much Sharia-compliant business brokers are placing each year found that only 5.5% of respondents placed between one and ten mortgages and another 5.5% placed between ten and 20 Sharia-compliant mortgages in the past year.<\/p>\n

Even though there seems to be a lack of market demand<\/a>, all the brokers that participated in the poll said they wanted, and attempted, to offer Sharia mortgages, but found that many clients still choose mainstream products<\/a>.<\/p>\n

When compared, a Sharia mortgage\u2019s part rent, part capital repayment aspect means that borrowers may find it difficult to meet the affordability criteria and\/or have eligibility issues based on their credit history. Sharia-compliant mortgages are often also more expensive due to the higher administration costs of the lender, which for many borrowers will be a deciding factor.<\/p>\n

Steve Jackson, owner of Jackson Potter Mortgage Brokers, said: \u201cIn my experience, a lot of people have gone down the route of applying for a Sharia mortgage and ultimately, for whatever reason have not been able to get there, and it\u2019s been declined.”<\/p><\/blockquote>\n

He added: “When they\u2019re rejected, they go back to the mainstream market and perhaps return in a couple of years to see if they would be accepted by a Sharia-compliant lender.\u201d<\/p>\n

An option for buy-to-let<\/h4>\n

Despite the lack of demand for residential Sharia-compliant mortgages, Jackson Potter Mortgage Brokers have found that it is an option for some of their buy-to-let<\/a> clients. \u201cA lot of them are investors and looking to invest in that compliant manner, hence why that\u2019s our niche,” said Jackson.<\/p>\n

Dilliway suggests that if Sharia-compliant mortgages were advertised and promoted in the same way as mainstream mortgages, an increase in take-up might be seen.<\/p>\n

Akhil Mair, managing director at Our Mortgage Broker, agrees: \u201cThe demand \u2013 and more importantly the actual product \u2013 is not widely marketed nor something that even comes in conversation.”<\/p><\/blockquote>\n

Currently, six standalone Islamic banks are operating in the UK, and there are a further 20 banks offering Sharia-compliant products. Al Rayan Bank has the broadest offering for borrowers, but challenger bank Gatehouse launched its Sharia-compliant mortgage, known as a home purchase plan, last year making it available to UK residents, international residents<\/a> and expats.<\/p>\n

With Islamic Finance one of the fastest growing areas in financial services, perhaps it\u2019s time for the lenders to listen to the brokers and consider marketing to the mainstream.<\/p>\n","protected":false},"excerpt":{"rendered":"

Specialist Sharia Islamic mortgages are available with certain lenders, and while take-up is currently low, this could improve if brokers change tack. While brokers strive to offer Sharia-compliant mortgages, Lilla Dilliway, mortgage and protection adviser at BlueWing Financials, suggests that the low demand is because applicable borrowers are unaware that a Sharia-compliant mortgage is a… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":6028874,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26,141],"tags":[25,158],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6028867"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6028867"}],"version-history":[{"count":1,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6028867\/revisions"}],"predecessor-version":[{"id":6098027,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6028867\/revisions\/6098027"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6028874"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6028867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6028867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6028867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}