Al Rayan Bank launches Islamic buy-to-let mortgages in Scotland
Just one month after opening its Shari’ah-compliant retail bank in Scotland, Al Rayan Bank has announced the launch of Shari’ah-compliant Buy to Let Purchase Plans (BTLPPs) for the Scottish market.
Unlike conventional buy-to-let mortgages, where the landlord borrows money from a lender and pays it back with interest, Al Rayan Bank’s buy-to-let customers in Scotland will buy their properties using the Islamic finance principle of co-ownership (Musharaka), purchasing the property together with the bank, as partners.
Each month they will make an acquisition payment which will increase their stake in the property. They will also pay an occupancy payment under a co-beneficiaries agreement for use of the bank’s share of the property. At the end of the finance term, when all payments have been made the customer will have sole ownership of the property.
Sultan Choudhury, Al Rayan Bank CEO said, “We’re delighted to continue the momentum of our successful launch in Glasgow with the announcement of Buy to Let Purchase Plans for Scotland. Islamic buy to let property finance is an important addition to the Scottish market and will provide landlords with a practical alternative to conventional, interest-bearing, property finance products; one that will not compromise their values or faith.”