Shariah Compliant Islamic Conveyancing

In the past, British Muslims have found it difficult to purchase (or remortgage) a property due to their faith. They are forbidden under Shariah Law to pay or receive interest, meaning that they were unable to take out a mortgage without acting against their faith. In 2002, the Government made Shariah compliant mortgages available in the UK and now many large banks offer this form of Islamic finance.

Islamic Finance is the name given to a group of products offered by Banks in the UK to allow Muslims (and Non-Muslims) to purchase (or remortgage) property using an instrument which is Shariah compliant.

The majority of solicitors and conveyancers in this country do not have an extensive knowledge of this fairly new way of purchasing property. At Touchwood Solicitors we have expertise in Islamic finance, which means you will avoid any delays and misunderstanding which often arise when using a solicitor with little knowledge of Shariah law. This allows the process to be as quick and straightforward as possible. There are no hidden additional charges, meaning that you pay what is agreed at the start of the process.

There are a number of Banks in the UK that offer Islamic Finance Products. At Touchwood Solicitors we have developed strong working relationships with the Islamic lending institutions and their appointed Solicitors, and are well versed with all the products currently on offer, namely

  • HSBC Amanah by HSBC Bank Plc
  • Al-Buraq by Arab Banking Corporation, which is also available through Lloyds TSB (underwritten by Bristol & West).
  • Manzil with Ahli United Bank
  • Home Purchase Plan with The Islamic Bank of Britain.
  • Al Hilal Islamic Bank of UAE Products.
  • United National Bank
  • ABT Finance with RBS

Shariah compliant mortgages are structured so that the person who wishes to purchase the property pays no interest but the banks still make money. It might be argued that charging rent or making a profit is no different to charging interest, in that ultimately the providers still make money. It is how that money is made that is the underlying difference between Islamic mortgages and conventional ones. So instead of making money through interest, banks will make money through profit or through rent when the bank owns the property as an asset.

The finance products offered by the Banks are usually based on one of these instruments:

  • Musharaka (also known as ‘diminishing Musharaka’) – The Bank will buy the property and grant you a lease. A Trust is created between you and the Bank. With each payment your share in the property will increase until you have bought all the shares in the property. The Bank will then transfer the legal title into your name. This is the most popular form of Islamic finance.
  • Ijara – The Bank will buy the property and grant you a lease for a term. Once the lease period is completed the Bank transfers the legal title of your new home to you.
  • Murabaha – The Bank will buy the property and will sell it back to you on a deferred basis.

We believe that the secret to the Firm’s success is as a result of our strong commitment towards client care, which in turn manifests itself into excellent service. We explain complex legal matters in a clear, impartial way and deliver advice in a friendly and courteous manner set within an ethical framework.

For further information or a quote please contact us on 0121 572 4979

Contact Touchwood Solicitors today for a Shariah conveyancing quote.

  • National coverage
  • Islamic mortgages offer an alternative financing structure. It’s not a 0 per cent deal to buy your house for nothing.
  • Islamic Home Finance / Remortgages and Financing