New opportunity for Muslim first time buyers

24-Mar-2005

A new mortgage has been unveiled by Lloyd's TSB which targets the Muslim first time buyer.

Sharia law forbids Muslims to to pay or receive interest, which has traditionally made it very difficult for them to obtain mortgages in the UK and has therefore kept many out of the property market.

With three quarters of Britain's two million Muslims estimated to live in accordance with Islamic principles, there has long been a large section of society who have found it almost impossible to get a foot on the property ladder.

Even affordable housing has often seemed out of reach of most Muslim first time buyers, with many having great difficulty when finding a mortgage.

As such Lloyd's is now joining HSBC and Ahli United Bank in offering home finance deals that comply with Sharia law, meaning aspiring homeowners from Islamic backgrounds should now be able to get onto the property ladder.

Under its alburaq Home Finance system, Lloyds will buy the home on behalf of a client, contributing up to 90 per cent of the purchase price.

The customer then pays the remaining percentage upfront, like a deposit, and repays the outstanding amount over an agreed term, together with a rental payment.

Mark Austin, of Lloyds TSB Islamic financial services, explained: "Finding the money for a new home can be tough at the best of times, but Britain's Muslims face an even more difficult dilemma."

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