The lender has developed the plan to enable tax efficient purchases of investment properties by landlords.
“This product will support UK-based landlords looking for an alternative to interest-bearing property finance facilities,” said Maisam Fazal, Al Rayan Bank chief commercial officer.
The new offer is underpinned by the Islamic finance principles of co-ownership with leasing. The bank and customers acquire the property in partnership. Customers’ monthly payments then gradually increase their share of ownership.
The lender has pledged a variable rental rate of 3.89 per cent and a fixed rental rate of 3.99 per cent on the new plan.
The rent-and-acquisition products offer maximum finance-to-value of 75 per cent. For rent-only, it’s 65 per cent.
“We have built a reputation on innovative Sharia-compliant products. The new limited company buy-to-let purchase plan broadens our offering and helps to ensure that we provide a full suite of products for landlords,” added Fazal.