IslamicFinance.de

From 2002 UK banks, led by Lloyds and HSBC, tried to appeal to British Muslims by offering specialised mortgage products differing in structure. The lender generally buys the property outright and leases it to the consumer, charging a rental fee in addition to taking repayments. However, the mainstream market’s foray into the sector did not go as planned and Lloyds ceased offering the products in 2010 with HSBC following suit in 2012. Sharia home purchase plans can be more expensive than standard mortgages, with the Islamic Bank of Britain charging variable rates of 3.99% and 3.59% for 20% and 35% deposits until 30 June 2016. However, the market may simply need more competition to drive rates down.