A quick question for brokers: what would you do if 80% of a fast-growing community told you the market was not serving them properly?
That is exactly what our recent national survey report found. Eight in 10 British Muslims say their home finance choices are restricted because of their faith, and their three biggest frustrations are long decision times (28%), excessive paperwork (22.6%), and poor customer service (18.9%).
For too long, Muslims seeking property finance that adheres to their religion have had to accept slow finance decisions and mountains of paperwork. We call this the “financial faith penalty”.
The situation is so bad that estate agents have told me personally that they’ve been put off selling properties to people using Islamic Home Purchase Plans (the Islamic equivalent of a mortgage) due to these delays, often rendering Islamic property finance inaccessible for faithful Muslims.
We recently issued a challenge to Islamic home finance providers, brokers and policymakers to help build a market where faith-aligned finance no longer means accepting slower application processes, excessive paperwork and poorer overall experiences than those available in the conventional market.
With the launch of our Home Purchase Plan (HPP) we are leading by example. We are a fintech focused on speed and offering paperless applications. Our HPP allows offers to be made within an hour depending upon credit rating and risk criteria.
We are outpacing high street banks, where it takes an average of two to four weeks to process a conventional mortgage according to The Home Owners Alliance.
However, removing the “financial faith penalty” for British Muslims is not just about providing speed, it’s also about financial inclusion. For many British Muslim families, property is the asset class of choice – a primary vehicle for building a pension and a lasting family legacy.
We have become the partner that helps individuals plant these roots securely and ethically, reflecting how people in the community actually buy homes rather than forcing them into rigid finance models.
As an example of this, we have included the first ever Sharia-compliant Family Assist feature for our HPP, allowing customers to add family members to their finance plan, helping them get more finance than they otherwise could while remaining the sole owner of the property.
GIFTED EQUITY
Customers can also take advantage of “gifted equity” where they can buy a property at an under-value price from family members. Offa then uses the full value for finance purposes, entirely avoiding the need for a deposit.
We also accept a minimum 5% deposit, and up to seven times is being accepted subject to affordability and underwriting criteria, and our HPP is fully FCA regulated.
We are now the third provider of Islamic Home Purchase Plans in the UK, and with buy-to-let, bridge, and bridge-to-let we have the widest range of Sharia-compliant property finance products.
Our launch represents a turning point for Islamic Home Finance in the UK. There are 3.87 million Muslims living here according to the latest census figures, with high home ownership aspiration, strong ethical alignment, and as our research reveals a segment that has been underserved but is now being modernised through technology.
Despite the many issues facing Muslim consumers highlighted by our report, there is some good news for the industry, with eight in 10 British Muslims (80.4%) stating that they would consider using an Islamic home finance product in the future. Demand appears to have been deferred rather than disappearing altogether.
Our report reveals a significant, largely untapped growth opportunity, with 75% of British Muslims stating that they have not ever used an Islamic home finance product.
For brokers, the opportunity is clear. Ethical finance is no longer a specialist sideline. Those who engage now, understand the structures and recognise the scale of demand will be best placed to benefit as this market continues to evolve.
