The Council of Mortgage Lenders (CML) has urged the Government to look into making Shari’ah-compliant mortgages less complex.
The CML and an independent working party, convened by the Governor of the Bank of England, will meet the Financial Secretary to the Treasury, Ruth Kelly MP, to seek ministerial support for implementing regulatory changes to put Islamic mortgage finance on a more equal footing with conventional mortgages.
Under Islam, interest is forbidden. Islamic mortgages involve a financier buying a property and selling it in installments, either at a higher price or at the same price plus rent for the period. Right-to-buy schemes cannot be used as the financier does not qualify for the incentive. State assistance with repayments in the event of financial hardship is not permitted, as it is interest-based.
Michael Coogan of the CML, said: ‘Regulatory changes would make it cheaper for Muslims in the UK to get products which do not conflict with their beliefs, making home ownership more accessible for the UK’s most significant religious minority.’