Chapter

Islamic Mortgages in the United Kingdom

Humayon A. Dar

in Islamic Perspectives on Wealth Creation

Published by Edinburgh University Press

Published in print May 2005 | ISBN: 9780748621002
Published online March 2012 | e-ISBN: 9780748653096 | DOI: http://dx.doi.org/10.3366/edinburgh/9780748621002.003.0010
Islamic Mortgages in the United Kingdom

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This chapter discusses the provision of Islamic mortgages in the UK, as well as some of the challenges faced by the providers that might have implications for the future developments of Islamic mortgages. While there are many who argue that there is significant demand for Islamic mortgages, there are some who are not optimistic about the growth in the market, especially because there is little done in creating awareness of Islamic finance in the Muslim community. There is anecdotal evidence that Muslims tend to associate Islamic finance with ethical values involving equity and economic justice, and that they reject the models of Islamic banking and finance based on the notion of the maximisation of shareholders' value, particularly if it adversely affects other stakeholders, especially customers. As the provision of Islamic mortgages in the UK is by profit-oriented banks, this may mean that demand for such mortgages is over-estimated by the market research firms employed by banks and building societies thinking of entering into this market. The chapter considers what Islamic mortgages may offer the UK, as well as the salient features of Islamic mortgages and how they compare with conventional interest-based mortgages. Included also are the problems associated with the existing mortgage products, and suggestions that may improve product development and delivery.

Keywords: Islamic mortgages; mortgages; Islamic finance; interest-based mortgages; profit-oriented banks

Chapter.  4099 words.  Illustrated.

Subjects: Society and Culture

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