Islamic finance is an alternative approach to funding that adheres to the moral principles of Islam. It’s built on the belief that money itself should not generate money – meaning interest (riba) is avoided wherever possible.
Instead, Islamic finance focuses on trading in goods and services with real value, creating a fair and ethical system of exchange. While designed with Muslims in mind, it is open to anyone seeking a more principled, transparent way to finance property.
Islamic finance isn’t limited to Muslims – anyone, whether UK-based or overseas, can benefit from it. It offers the same outcomes as a conventional mortgage but follows Shari’ah-compliant principles and ethical guidelines.
Islamic property finance typically follows one of two key structures:
The bank buys the property on your behalf, then sells it to you at an agreed profit margin. You repay the amount in instalments over a fixed period. This structure is straightforward, with predictable payments – ideal for those seeking certainty over costs.
You and the bank purchase the property together. Over time, you gradually buy out the bank’s share through regular payments. During this period, you pay rent on the bank’s portion of the property.
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