The transaction, Meridian Funding 2025-1, was supported by institutional investors who have bought purchase certificates backed by StrideUp’s portfolio of halal home finance contracts.
With StrideUp, the borrower jointly owns the property, paying monthly rent and acquiring greater equity in the property until it is bought outright. This is because in Islam, interest payments are forbidden, hence the creation of home purchase plans (HPPs) in the Islamic finance market.
The Islamic finance market represents around four million UK Muslims – constituting around 7% of the UK market – who StrideUp said have been “under-served by traditional financial services”.
StrideUp said the securitisation will provide “new capital to support future growth”.
Sakeeb Zaman, CEO of StrideUp, said it was the first Sharia-compliant securitisation transaction backed by HPPs that has been issued since 2018.
Aldermore Insights with Jon Cooper: Edition 5 – Feeling enthusiastic about next year’s run-of-the-mill market
Sponsored by Aldermore
He noted that there was growing demand for such products, which showed that the Muslim population in the UK are growing more aware of homeownership options that are in line with their beliefs.
“This game-changing moment has only been possible because of a generational shift among young Muslims, who are extremely active in exploring the homeownership options available to them, with a strong conviction that they shouldn’t have to compromise their faith.
“If it wasn’t for this groundswell of desire from UK Muslims, the market simply wouldn’t exist – and it is creating opportunities for all,” Zaman continued.
He added: “We are proud to be re-energising the Islamic finance sector with this deal. The feedback we have had from across the financial services sector highlights our contribution in broadening financial inclusion in the UK. We have a strong roadmap of products that extend well beyond homeownership to capture this opportunity.”
At the start of 2024, the firm was added to the Legal & General (L&G) Mortgage Club lender panel.
