Finance


Sector Focus Islamic home finance on the rise


Edgbaston-based Al Rayan Bank, the UK’s largest Sharia compliant retail bank, has revealed that the number of applications for its Home Purchase Plans (HPPs) and Buy To Let Purchase Plans (BTLPP) reached an all-time high in 2016 as demand for Islamic home finance continued to increase. Demand, as measured by the volume of


eligible enquiries to the Bank, increased by nine per cent in 2016 and has increased by 99 per cent in the last five years, indicating that Islamic banking has become a preferred method of property financing for a significant number of people. Keith Leach, Al Rayan Bank’s chief commercial


officer, said: “In recent years we’ve worked hard to ensure that ethical, Sharia compliant banking products are as accessible as possible to customers of all faiths. “We’re therefore very pleased that our


products, and Islamic banking in general, is clearly becoming an established part of British retail banking. “There is still substantial room for growth in


this market and we expect demand to continue to rise in the coming years.” HPPs and BTLPPs are joint ownership


agreements which do not involve interest, as Muslims believe that interest promotes financial unfairness in transactions which ultimately leads to financial unfairness in society. Al Rayan Bank’s customers purchase their properties together with the bank as partners.


Keith Leach: Demand for Islamic banking products is rising


Over time they acquire the bank’s share through a monthly acquisition payment, whilst paying rent to use the portion of the house that they do not yet own.


Refinancing completed for city centre building


Specialist finance brokers Finance 4 Business (F4B) have completed the refinancing for a building in the heart of Birmingham. The former Metropolitan House


office block on the Hagley Road has been converted into 136 high spec student bedroom accommodation. The deal was placed with one of


the new breed of Challenger Banks, Cambridge & Counties. The £7.7m deal is the bank’s largest to date, which only began lending in 2012. In the past, this would usually


have been reserved for the High Street, but this deal emphasises the benefits of a broker to construct a deal that is suitable for all parties. This was the final piece of what


has been an ongoing relationship, highlighting the importance of working with a professional broker. Paul Atkinson, head of


mortgages F4B, said: “As a company we were fully immersed in this transaction from start to finish. “F4B secured the initial financing


required to allow for the shareholding structure to be amended, into a fundable format and allow planning to be achieved.


“Following the success of this


transaction, we facilitated the drawdown of a development facility, enabling the client to deliver what is clearly a real asset to the city of Birmingham. After the uncertainty created by the referendum, F4B were instructed to secure a long- term mortgage to repay the development finance facility. “Having access to an extensive


range of lenders, the client and I decided to proceed with Cambridge & Counties Bank. “Neil Reddington and his team


handled the transaction with absolute expertise and to have completed such a complex mortgage in less than two months is testament to their commerciality and can-do attitude to business.” Neil Reddington, Cambridge &


Counties director of business development for the West Midlands, said: “The team is very proud that this deal – the bank’s biggest to date – was led from Birmingham, using Birmingham professionals, for an important addition to the burgeoning student accommodation market in the city.”


March 2017 CHAMBERLINK 55 The increased demand for Islamic home finance


is mirrored by an increase in the value of Sharia compliant savings provided by Al Rayan Bank. Last year the value of Islamic savings, which


are ethical profit sharing agreements that avoid interest, increased by 47 per cent compared with the previous year and by 449 per cent compared with 2012. Notably Al Rayan Bank believes that significant


proportion of the increase has come from non- Muslim customers.


‘There is still substantial room for growth in this market and we expect demand to continue to rise in the coming years’


Al Rayan Bank estimates that 94 per cent fixed term deposit customers who joined the bank last year, and 26 per cent of all customers choosing to bank with it, are not of the Muslim faith. Al Rayan Bank is an Islamic Bank, founded on


faith-based, ethical principles that derive from trade, entrepreneurship and risk-sharing, in which the customer and bank work together as partners towards a mutually profitable end. These principles prohibit Al Rayan Bank from


investing savers’ deposits in unethical activities such as gambling, pornography, speculation, tobacco, arms and other activities not in keeping with the values of Islam.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72