Flexible Home Ownership

HPP 650 X 300We are a nation of homeowners. According to the government’s figures, 63% of all households – which equates to nearly fourteen and a half million households – in England were owner occupied between 2015-2017, either because they owned their home outright or were buying it.

Getting on the Housing Ladder

The annual Homeowner Survey 2019, polled by YouGov, gives a state of the nation report on the biggest concerns and latest trends affecting UK homeowners and those keen to own their own home.

The latest results reveal that the number one UK housing issue remains the difficulty of getting on the property ladder. The figures are higher than ever, with 87% of UK adults and 91% of aspiring first-time buyers stating this as a serious problem. And the main barrier to getting on the housing ladder, according to 85% of those surveyed, is saving for a deposit.

Al Rayan Bank’s Home Purchase Plan range includes products that require deposits from as low as 5%. And as they’re not just open to first time buyers, they can help existing homeowners take the next step up the property ladder too.

To make it easier for customers moving existing home finance to Al Rayan Bank, we also offer Fees Assisted Home Purchase Plans. The refinance costs are assisted by waiving or contributing towards some of the upfront fees normally associated with refinancing home finance from one provider to another.

Staying on the Property Ladder

Once home finance is in place and the house has been purchased, the focus becomes moving up the property ladder. Al Rayan Bank aim to support customers to do this through low discounted variable rental rates and fixed rental rates.

Al Rayan Bank continually strives to keep our rental rates as low as possible and in January 2020, we made significant reductions to the rental rates across our entire HPP range. 

Al Rayan Bank has also launched new five-year fixed rental rate product. These can make HPP payments more manageable and easier to budget for some customers, as they know exactly how much they will be paying each month and can therefore plan their finances accordingly.

There’s more information about our full Home Purchase Plan range on our website here.

How do Home Purchase Plans work?

Home Purchase Plans provide a completely halal way to finance a property, using the Islamic finance principles of co-ownership (Diminishing Musharaka) with leasing (Ijara).

Al Rayan Bank buys the property together with our customers, as partners. Every month the customer makes a HPP payment, which has two elements: a rental payment to the bank for their share of the property, and an acquisition payment to buy the Bank’s share.

As time goes by, the customer’s stake in the property grows and the Bank’s diminishes, reducing the amount of the rental payment. At the end of the agreed term, when all acquisition payments have been made and the finance has been settled, ownership of the property transfers fully to the customer.

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