Our team of experienced Home Purchase Plan advisors will guide you through the Home Purchase Plan journey and tailor their guidance to your unique financial situation.
We specialize in Islamic finance and adhere to stringent Sharia principles in all our transactions. Our solutions are designed to be halal and free from any interest-based elements.
We have established strong relationships with a wide network of lenders who offer Islamic finance products. This allows us to access a variety of options and negotiate favorable terms on your behalf.
Sunnah Finance is a leading Islamic Home Purchase Plan facilitators committed to providing ethical and Sharia-compliant financial services. With our extensive network of lenders and our deep understanding of Islamic finance principles, we help individuals and families secure the finance they need for homebuying needs while adhering to their religious beliefs.
The Islamic law of Sharia forbids the charging and paying of interest, something which is commonplace in standard UK Home Purchase Plans. This can provide difficulties for Muslims looking to purchase properties in the UK, as most Home Purchase Plan lenders do not abide by Sharia law.
There is a misconception amongst the general public that Islamic finance is the same as conventional finance, simply because both specify the finance cost as a percentage. This is a huge misnomer because using a percentage is just a method of pricing. What is most important, is not the use of the percentage, but rather what such a percentage represents.
The Islamic finance concept can also refer to the investments that are permissible under Sharia. There are specific rules that apply to Islamic finance, which differ from conventional finance. This is particularly true of Home Purchase Plans, which are conventionally different to standard financial practice. Moved from 'What is Islamic Financing'
The Intermediary Magazine Article June 2024
The diminishing Musharrakah (an agreement between two or more partners to combine their assets, services, obligations or liabilities for the purpose of making profit) structure is the most common structure in the UK. Under this structure, the purchaser and Islamic bank will be purchasing the property jointly. The purchaser then slowly buys the property back from the bank whilst also paying rent on the bank’s portion that the purchaser is yet to own.
Firstly, Islam considers that lending money with interest payments accrued is an exploitative practice that favours the lender. According to Sharia law, charging interest is strictly prohibited.
Any activities which contravene the fundamentals of Islam such as investing in businesses that produce and selling alcohol or pork, are prohibited. The activities are considered haram and so any financial institution that invests money into these practices is forbidden.
Thirdly, Sharia law strictly prohibits speculation or gambling with finance, which is called maisir. Islamic financial institutions cannot therefore be involved in practices which speculate on future events.
Finally, Islamic finance bans participation in any transactions with excessive risk. The term ‘gharar’ measures how risky an investment may be. Gharar defines such practices as derivative contracts and short-selling, which are forbidden in Islamic finance.
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