Islamic home finance gains traction as ethical demand rises in Britain
A new report by Offa highlights the growing interest in Islamic home finance among both Muslims and non-Muslims in Britain. While 8 in 10 British Muslims feel their housing options are limited by their faith, a significant number of non-Muslims are also considering Sharia-compliant mortgages. The findings reveal key challenges in the sector, from slow approval times to dissatisfaction with current services.
The study found that only 12.8% of British Muslims currently use Islamic home finance, with another 11.5% having used it in the past. Yet, 94.2% believe it is important for financial products to match their ethical or religious values. Many who rely on conventional mortgages report discomfort, with half feeling unhappy or uneasy about not having a Sharia-compliant option.
For those who do use Islamic home finance, delays and inefficiencies are common. Nearly two-thirds waited up to two weeks for a decision, while 28% cited long processing times as a major issue. Excessive paperwork (22.6%) and poor customer service (18.9%) were also frequent complaints.
Beyond the Muslim community, interest is spreading. Over 40% of Gen Z and Millennial non-Muslims would consider Islamic home finance, and 63% of all non-Muslims view its ethical principles favourably when explained. British Muslims themselves prioritise homeownership for stability (79.1%) and generational wealth (18.6%), but many struggle to find suitable financing.
The report calls on providers, brokers, and policymakers to address these gaps. It urges improvements in speed, transparency, and customer support to better serve both Muslim and non-Muslim buyers.
The findings underscore a clear demand for more accessible and efficient Islamic home finance. With growing interest from younger non-Muslims and persistent dissatisfaction among Muslim users, the industry faces pressure to reform. Faster decisions, simpler processes, and stronger ethical alignment could widen its appeal and better meet the needs of diverse buyers.
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