Al Rayan Bank launches Scottish buy-to-let range

by: Heather Greig-Smith
  • 10/01/2017
  • 0
Al Rayan Bank launches Scottish buy-to-let range
Al Rayan Bank has launched Sharia compliant buy-to-let purchase plans (BTLPPs) for the Scottish market.

The bank, which established its presence in Scotland last month, is offering two-year fixed rates of 2.99% for landlords with 35% deposits and 3.39% for those with 25% deposits. It has also launched discounted variable rates of 3.19% and 3.49% respectively.

Unlike conventional buy-to-let mortgages, where the landlord borrows money from a lender and pays it back with interest, Al Rayan Bank’s customers will buy their properties using the Islamic finance principle of co-ownership (Musharaka), purchasing the property together with the Bank, as partners.

Each month they will make an acquisition payment which will increase their stake in the property. They will also pay an occupancy payment under a co-beneficiaries agreement for use of the bank’s share of the property. At the end of the finance term, when all payments have been made the customer will have sole ownership of the property and will benefit from any appreciation.

Following the fixed or discounted period, all occupancy payment rates will revert to the Al Rayan Bank Variable Occupancy Payment Rate. For BTLPP products this is currently Bank of England Base Rate (BBR) plus 4.99%.

The bank already provides Sharia compliant home purchase plans and commercial property finance in Scotland.

As an Islamic bank, Al Rayan Bank does not use any interest-bearing products to finance customers’ properties. Instead it uses the savings deposits from its customers, managed in accordance with Sharia principles.

Sultan Choudhury, chief executive of Al Rayan Bank, said: “We’re delighted to continue the momentum of our successful launch in Glasgow with the announcement of buy-to-let purchase plans for Scotland.

“Islamic buy-to-let property finance is an important addition to the Scottish market and will provide landlords with a practical alternative to conventional, interest-bearing, property finance products; one that will not compromise their values or faith.”

There are 0 Comment(s)

You may also be interested in


Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.


Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions

Read previous post:
head shot of Karen Bennett
Broker confidence over business outlook rises, says Shawbrook

Brokers are increasingly optimistic about their business prospects for 2017, with confidence rising since last summer, according Shawbrook Bank’s broker...