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Nearly half of UK homebuyers would use Islamic mortgage, claims lender

Almost half (45%) of homebuyers would consider using a Sharia-complaint mortgage lender, despite there being perceived Islamophobia in the UK.

Over one in three (37%) UK homebuyers said they would be most attracted to a Shariah-compliant provider because funds aren’t invested in industries like tobacco, gambling, alcohol, adult entertainment, and the arms industry.

Islamic mortgages are known as Home Purchase Plans.

Gemma Donnelly, head of direct home finance at Gatehouse Bank, said: “Today’s rate reductions and the launch of our 95% FTV (finance-to-value) product have been designed with the research in mind, which revealed that 4 in 10 (40%) UK homebuyers allocate a deposit of between 5-10% when purchasing a home.

“We aim to make our ethical, Shariah-compliant products accessible to all, and hope our customers will make the most of our offering.

“Our green home finance products offer a reduced rental rate for customers purchasing a home with an energy efficiency rating of A or B, with Gatehouse Bank offsetting the carbon emissions generated by the average UK property for as long as the customer remains with the Bank with a qualifying property.

“This was an important provision for nearly half (48%) of respondents, who said they would opt for a provider who offered incentives for buying a property with a higher EPC rating.”

Nearly three quarters (72%) of 18–24-year-olds said they would consider a Shariah-compliant provider, compared to just a quarter (26%) of those aged 65 and above who said the same.

Lottie Dougill, head of intermediary sales at Gatehouse Bank, said: “It’s fantastic to see growing awareness of Shariah-compliant finance amongst consumers, particularly in younger generations, with nearly half (47%) of 18-24-year-olds keen to align their financial goals to their ethical beliefs.

“However, there is still work to be done by finance providers and brokers alike. It is important to continue addressing any lingering misconceptions around Shariah-compliant finance and thus closing any potential knowledge gap so that homebuyers are aware of all their options and can take advantage of the benefits that Islamic finance has to offer.”

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