The Islamic home finance fintech company’s report, entitled From faith penalty to financial fairness: Unlocking the potential of British Islamic home finance, surveyed 3,000 people nationally and found that 70% of British Muslim respondents struggle to find products that meet Islamic values.
Desire for homeownership strong but Islamic finance adoption barriers remain
Some 79.1% of respondents said they wanted to provide a stable home for their family through homeownership, while 12.5% cited building generational wealth and 6.1% noted investment and/or rental income.
Despite the report finding that 94.2% of British Muslims said it was important that their financial products align with their religious or ethical beliefs, just 12.8% are using Islamic home finance products and only 11.5% had used them historically – a significant gap. Respondents cited slow finance decisions and extensive paperwork as the main challenges of Islamic home finance products, with 15.7% waiting over a month for a finance decision.
A range of barriers to adoption were identified; among those who chose not to use Islamic finance, the vast majority (90.5%) said it was because it was too costly, while almost 70% cited a lack of options and 59.9% said they were unaware of it.
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Islamic finance’s ethics particularly appealing to younger generations
As Islamic finance products avoid investing in industries that are considered ethically harmful, such as arms, the ethics appealed to over 60% of the British non-Muslims surveyed.
Moreover, four in 10 non-Muslim Gen Zers and 37% of non-Muslim millennials said they would consider using Islamic home finance, compared to just 7% of baby boomers.
‘British Muslims are being under-served and deterred’
Sagheer Malik, Offa’s chief commercial officer and managing director of home finance, said: “Property is the asset class of choice for many of the UK’s 3.87 million Muslims, both as a route to generational wealth and as a long-term financial foundation, yet our insightful research report reveals that British Muslims are being under-served and deterred by slow, outdated and opaque Islamic home finance provision.
“This is not a niche concern; in fact, it goes to the heart of financial fairness and inclusion in modern Britain. Our research indicates that British Muslims both desire and deserve high-quality, Sharia-compliant home finance products that match mainstream standards on price, speed and simplicity.”
He added: “There is no reason why we should not offer equivalent modern products and systems driven by the latest technology, which is what we at Offa are delivering.”
