Islamic Bank of Britain launches new Home Purchase Plan

Islamic Bank of Britain (IBB) has revealed the details of its Home Purchase Plan (HPP), which is billed as a mortgage alternative that enables customers to purchase their homes in a Shariah compliant manner.

IBB explained that the plan was based on the Islamic financing principles of Ijara (leasing) and Diminishing Musharaka (partnership). Under this arrangement, the customer and the bank each contribute towards the purchase of the home and both become partners.

Over the period of the agreement, the customer makes monthly purchase instalments in order to buy the bank's share of the property. With each instalment paid, the bank's share in the property diminishes while the customer's share increases.

Sultan Choudhury, commercial director at IBB, said: "Islamic Bank of Britain's Home Purchase Plan is a highly competitive product for customers who wish to finance their home purchases in an Islamic and ethical way.

"Open to all faiths, the HPP gives UK consumers a real alternative to conventional interest-based mortgages, which have suffered in the current financial climate."

Choudhury added: "[HPP is] the only product in the UK whose source of funds is completely 100 per cent Shariah-compliant".