Shared ownership is a popular way to get on the UK property ladder—but for Muslim buyers, it raises questions around Sharia compliance. If you want to combine shared ownership with halal finance, it's possible—provided the structure avoids riba (interest) and ensures that the arrangement meets Islamic legal and ethical standards.
At Fraser Bond, we support clients looking to enter the property market through ethical, Sharia-compliant financing, including those using shared ownership schemes.
Shared ownership is a government-backed scheme that allows buyers to:
Purchase a portion of a home (typically 25–75%)
Pay subsidised rent on the remaining share
Increase ownership gradually through "staircasing"
It’s ideal for first-time buyers who may not have a full deposit or meet affordability for outright purchase.
Shared ownership can be halal, but only when structured carefully. The key considerations for Sharia compliance include:
No interest-based lending (riba)
Clarity of ownership and rental agreements
No gharar (excessive uncertainty)
Property use must be halal (residential/family use)
The challenge is that most shared ownership properties are financed using conventional mortgages, which are interest-based. However, with the right Islamic finance partner, you can access Sharia-compliant shared ownership.
Islamic banks and lenders may support shared ownership using the following models:
You and the Islamic bank jointly own the property share.
You buy out the bank’s portion gradually, while paying rent on their share.
This mirrors both the shared ownership structure and Islamic finance ethics.
The Islamic lender buys your share and sells it to you at a fixed profit.
You repay in instalments without interest.
Less common for shared ownership but may apply to larger deposits.
Note: Not all housing associations allow Islamic finance partners in shared ownership deals. Fraser Bond can help you identify suitable properties and associations.
To use halal finance for shared ownership, you’ll typically need:
Minimum deposit (usually 5%–10% of your share)
Proof of income (employment or self-employed)
Clean credit history
UK residency or visa status
Property located in England or Wales and part of a shared ownership scheme that permits third-party financing
Some Sharia-compliant banks that may assist include:
Al Rayan Bank – Offers Diminishing Musharakah; flexible for residential use
Gatehouse Bank – May support partial home ownership on approval
UBL UK – Case-by-case basis for shared or co-financing structures
Fraser Bond can liaise directly with these lenders to assess your suitability.
Fraser Bond provides a full-service solution, including:
Identifying eligible shared ownership properties
Screening housing associations that work with Islamic lenders
Connecting with halal mortgage providers and guiding application
Legal and compliance support for Sharia contract review
Staircasing support when you're ready to increase your share
First-time buyer advisory with end-to-end assistance
We ensure your purchase remains 100% Sharia-compliant and free from interest, while helping you access affordable homeownership in London or elsewhere in the UK.
Shared ownership can be an excellent entry point to owning a home—and with Fraser Bond's Islamic finance advisory, it can also be fully halal. We help first-time buyers navigate eligibility, lender approvals, and legal compliance to ensure your purchase aligns with your values.
Visit FraserBond.com or speak to our halal property team today to explore shared ownership opportunities the Islamic way.
