Almost 50% of UK Homebuyers Open to Islamic Mortgage, Says Finance Firm

Close to half of the homebuyers in the UK (45%) are open to the idea of getting a mortgage that adheres to Sharia law, even though there are concerns about Islamophobia in the country.

More than a third (37%) of homebuyers in the UK find Sharia-compliant lenders appealing because they avoid putting money into industries such as tobacco, gambling, alcohol, adult entertainment, and weapons.

These types of Islamic mortgages are termed Home Purchase Plans.

Gemma Donnelly, who leads the home finance department directly at Gatehouse Bank, stated: “The recently lowered rates and the introduction of our 95% finance-to-value product were inspired by data showing that 4 out of 10 (40%) UK homebuyers typically pay a deposit of 5-10% for a new house.

“We intend to offer our ethical, Shariah-aligned products to everyone and encourage our clients to benefit from what we have.

“For those buying a highly energy-efficient home, ranked A or B, we provide a green home finance product at a lower rental rate. Additionally, Gatehouse Bank commits to balancing out the carbon output of an average UK home for the duration a customer with a qualifying property stays with us.

“This eco-friendly approach was significant to almost half (48%) of the participants, who would choose a lender that rewards purchasing a more environmentally friendly property.”

A sizable majority (72%) of younger people, aged 18–24 years, would consider Shariah-based financing, while only a quarter (26%) of those 65 or older would do the same.

Lottie Dougill, who leads the intermediary sales at Gatehouse Bank, mentioned: “It’s encouraging to see a growing recognition of Shariah-compliant finance, particularly among the youth, with nearly half (47%) of those between 18-24 wanting their finances to reflect their ethics.

“Still, there’s more work for financial institutions and brokers to do. It is crucial to further clarify any false impressions about Shariah-compliant finance and bridge the knowledge gap so homebuyers can be fully informed of all their choices and reap the benefits that Islamic finance has to offer.”