For many Muslim buyers in the UK, purchasing a home must align with both financial goals and Islamic principles. Conventional mortgages involve interest (Riba), which is prohibited under Sharia law. As a result, buyers are increasingly turning to Islamic Home Purchase Plans (HPPs)—a faith-compliant alternative to traditional loans.
At Fraser Bond, we help clients understand how Islamic home purchase plans work in the UK, connect them with Sharia-compliant banks, and guide them through the full property acquisition process—ethically and legally.
An Islamic Home Purchase Plan (HPP) is a Sharia-compliant alternative to a mortgage. It allows buyers to acquire a home without paying interest. Instead of lending money, the Islamic bank and the buyer jointly purchase the property. The buyer then pays rent and gradually buys out the bank’s share.
No interest (Riba)
Asset-backed structure (property, not money, is financed)
Shared risk between bank and buyer
Certified by Sharia boards
Regulated by the Financial Conduct Authority (FCA)
There are three main Islamic finance structures used by UK banks for property purchase:
You and the bank co-own the home.
You pay rent on the bank’s share and buy out their equity over time.
With each payment, your ownership increases until you own the home outright.
Most popular model used by UK Islamic banks.
The bank buys the property and leases it to you.
You pay fixed rent for a set period.
At the end of the term, ownership is transferred to you.
The bank purchases the property and sells it to you at a profit.
You pay the total amount in fixed instalments.
Less common for residential use but suitable for short-term ownership or refinancing.
Property Search
You select a suitable property. Fraser Bond helps ensure it qualifies for Islamic finance.
Application with Islamic Bank
You apply to an FCA-regulated Islamic bank (e.g., Al Rayan, Gatehouse). Approval is based on income, deposit, and property valuation.
Joint Purchase Agreement
The bank either co-purchases the property (Musharaka) or buys it outright (Ijara/Murabaha), then structures your monthly payments.
Monthly Payments Begin
You pay:
Rent on the bank’s share (or fixed instalments in Murabaha)
Gradual equity payments (if applicable)
Full Ownership Transfer
Once all payments are complete, you become the full legal owner of the property.
Fraser Bond partners with the following FCA-regulated Islamic finance providers:
Diminishing Musharaka model
Serves residents, non-residents, and expats
Available for residential and Buy-to-Let homes
Flexible income criteria (salaried, self-employed, expats)
Offers both residential and investment HPPs
Energy-efficient property incentives available
Murabaha-based property finance
Usually accessed via specialist brokers
Suitable for high-net-worth and portfolio buyers
We offer tailored services for Muslim clients seeking ethical property ownership, including:
Matching you with the right Islamic lender
Confirming property eligibility under Sharia rules
Preparing documents for approval
Coordinating with legal and Sharia-compliant professionals
Serving buyers in key areas like Newham, Tower Hamlets, Ealing, Brent, and Kensington
Whether you’re a first-time buyer or a seasoned investor, Fraser Bond ensures your home purchase is both faith-compliant and financially secure.
Now you understand how Islamic home purchase plans work in the UK, it’s time to take the next step. Let Fraser Bond guide you through Sharia-compliant finance, from property search to final ownership—without compromising your values.
Visit FraserBond.com to book a consultation with a Halal mortgage advisor.
