LONDON HALAL HOME LOANS WITHOUT RIBA

In London, an Islamic mortgage without interest (Riba) is recognised as Islamic finance product in UK guidance and practice (e.g., Land Registry/HMRC materials explain how diminishing-musharaka/ijara are documented), and—crucially—is regulated as Home Purchase Plans (HPPs) rather than conventional mortgages, giving consumers the same core protections under UK law.

Why London matters: the UK has pursued “tax neutrality” and legal clarity for Islamic finance since the early 2000s, helping London develop the deepest ecosystem for Sharia-compliant finance in the West.

London has put Islamic home-finance under the FCA’s mortgage rulebook (MCOB); the FCA Handbook applies conduct, disclosure, and customer-protection rules to HPPs—e.g., pre-contract information and offer requirements—so consumers get broadly the same protections as with conventional mortgages.

What types of Islamic mortgages without interest are available in London ?

In London, Islamic mortgages without interest are offered through three main Shariah-compliant structures:

1. Ijāra (Lease-to-Own): The financier buys the property and leases it to the client. The client pays rent, and ownership may transfer at the end.
2. Diminishing Mushārakah (Declining Partnership): The financier and client co-own the property. The client gradually buys out the financier’s share while paying rent on the remaining share.
3. Murābaha (Cost-Plus Sale): The financier purchases the property and resells it to the client at a fixed markup, payable in installments. Ownership transfers immediately.

✅ All three models avoid interest (riba) and instead use rent, partnership, or markup to structure repayments in a halal way.

Which Islamic banks and alternative Islamic lenders in London provide Islamic mortgage without interest ?

Here are the current London-based providers of Islamic home finance (no riba) and the key conditions/eligibility they publish. I’ve split them into (A) retail UK-resident options and (B) private-bank/expat options.

A) London-resident retail options

• Gatehouse Bank — Home Purchase Plans (HPP)
  Structure: Diminishing co-ownership with lease (HPP). Who for: UK residents buying or refinancing in England & Wales. Max finance: up to 95% FTV on new-build houses (up to 90% on new-build flats); up to 90% for finance amounts to £750k; 2- & 5-year fixed “rental” options; online Decision-in-Principle in ~10 minutes. Assessment: affordability-based; HPPs “stressed” per product guide. Gatehouse Bank
• Al Rayan Bank — Home Purchase Plan (Premier)
  Structure: Diminishing co-ownership + lease (HPP). Who for: offered via Premier team (private-bank style); England & Wales properties. Key terms published: quarterly rent reviews; margin-increase cap of 2% over initial margin; additional acquisition payments allowed at review months (min £4,000 fee £25); leasehold must have 50 years + finance term remaining; separate tariff for fees. (Note: public commentary suggests retail HPP availability has narrowed; check Premier availability before applying.) AlRayan Bank
• Pfida (formerly Primary Finance) — “OwnTogether” (alternative to a mortgage)
  Structure: partnership/shared-ownership model (debt-free; not an FCA-regulated HPP). Who for: UK buyers willing to join a waiting list. Initial equity (deposit): recommended 20%, accepted from 15%. Pricing: usage rent not pegged to interest rates; annual rent review with caps; claims risk-sharing on sale. Regulatory note: outside FCA mortgage/HPP regulation; no FSCS/FOS protections. Pfida
• Offa — (new) FCA-authorised for Home Purchase Plans
  Status: FCA authorised (Mar 18, 2025) to provide HPPs; Offa is already active in Sharia-compliant buy-to-let/bridging. Action point: check current product roll-out and criteria when you apply. offa.co.uk

B) Private-bank / expat & HNW options (London desks; often for overseas clients)

• Gatehouse Bank (Private/International) — alongside retail HPPs, runs property finance for UK expats/international clients; product pages and news confirm active offers. Conditions vary by residency and FTV band. Gatehouse Bank plc
• QIB (UK) — Private Banking Property Finance (Murabaha)
  Who for: private-bank clients financing London residential property; minimum relationship balance £1,000,000 noted in market guides. Structure: Murabaha (purchase or refinance). qib-uk.com
• ADIB UK — Real-estate financing (Sharia-compliant)
  London team financing UK property, widely used by GCC/non-UK residents; documentation and private-bank assessment apply. adib.co.uk

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Quick checklist before you choose

• Confirm the provider is FCA-authorised for HPP (where applicable) and obtain the Sharia certificate for the exact product.
• Check maximum FTV/deposit, fixed-term options, rent review rules/margin caps, fees, early settlement, and property eligibility (England & Wales, lease term, etc.).
• For non-FCA alternatives (e.g., Pfida), understand the regulatory differences and protections. FCA Handbook

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