Lower deposit Home Purchase Plans now available
Britain is often referred to as a “nation of homeowners” and the majority of 18 to 40 year-olds in the UK believe they will become homeowners. Yet the latest English Housing Survey (2015-2016) from the Department for Communities and Local Government shows home ownership in England has fallen to its lowest level for 30 years. With property prices in the UK continuing to rise, how can first time buyers get on the property ladder?
Saving for a deposit can be the biggest obstacle to securing home finance. This “deposit barrier” could mean that people who could afford the monthly payments could miss out on home ownership.
Al Rayan Bank has launched a new lower deposit Home Purchase Plan (HPP) that requires a deposit as low as 5%. They are not just open to first time buyers, they could help existing homeowners take the next step up the property ladder.
There’s more information about these, and our HPPs, including Buy-To-Let Purchase Plans here. HPPs provide a completely halal way to finance a property, using the Islamic finance principles of co-ownership (Diminishing Musharaka) with leasing (Ijara).
The property is purchased together with Al Rayan Bank, as partners. The customers monthly payment, 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, Al Rayan Bank’s stake in the property diminishes.
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. You can view an animated case study here.
Home Purchase Plan customers in Scotland pay an 'occupancy payment' under a 'co-beneficiaries' agreement.
YOUR HOME MAY BE AT RISK IF YOU DO NOT KEEP UP THE PAYMENTS ON YOUR HOME PURCHASE PLAN