Expats choose Al Rayan Bank for home finance

Sharia compliant UK bank sees 141% increase in expat property financing since 2013 

Al Rayan Bank, the UK’s only wholly Sharia compliant retail bank, has revealed that it has experienced significant growth in the number and volume of property transactions financed for British citizens, of all faiths, living outside of the United Kingdom since 2013, particularly from expats working in the Gulf Co-operation Council (GCC) region, principally in Qatar and the United Arab Emirates.

According to figures from the Office of National Statistics (ONS), an estimated 4.7 million UK-born people currently live abroad*. With an increasing number looking to buy property back home**, Al Rayan Bank began to actively target this market in 2013. The number of annual expat property cases financed by the Bank has subsequently increased by 141%, with 15% of new retail property finance cases coming from expats between January and May this year.

Commenting on the increasing popularity of Al Rayan Bank’s expat home finance products, Sultan Choudhury, Al Rayan Bank CEO said, “British Expats seeking to buy a home to come back to in the UK or for investment purposes have for a variety of reasons found it difficult to secure property finance. Al Rayan Bank identified the expat market as an underserved sector in 2013, targeting resource towards it accordingly. As a result we have experienced significant growth in this area of our business.”

Al Rayan Bank finances property for people living and working in any country, excluding those on the sanctioned list, and currently offers three products for expats. All are available at discounted variable and fixed rental rates.

  • ‘Expat’ Buy to Let Purchase Plan: Where the expat customer purchases a property in the UK as an investment. Al Rayan Bank will provide 65% finance to value (FTV)
  • ‘Holiday home’ HPP: Where the expat customer purchases a property for their visits to the UK. Al Rayan Bank will provide 75% FTV
  • ‘Split family’ HPP: Where one of the customers named on the HPP lives overseas, but the family reside in the UK. The finance is based on the expat’s salary and Al Rayan Bank will provide 80% FTV

As an Islamic bank, Al Rayan Bank’s property finance products do not involve interest, as this is prohibited for Muslims. Instead they are based on the Islamic finance principles of co-ownership (Diminishing Musharaka) and leasing (Ijara). The customer and the Bank buy the property as partners and the customer pays rent on the Bank’s share in the property over an agreed term. When all acquisition payments have been made and the finance has been settled, ownership of the property transfers fully to the customer.

Al Rayan Bank is dedicated to strong, faith-based ethics and great customer service, and in May 2015 it was named by Global Finance magazine as one of the best Islamic banks in the world, in its annual list of the World’s Best Islamic Financial Institutions.

As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of Financial Services Compensation Scheme.

* https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/116025/horr68-report.pdf
** http://www.propertywire.com/news/global-news/uk-expat-property-buyers-2015042810443.html


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