Nearly half of UK homebuyers are now open to the idea of using Islamic mortgages for their home purchases. This news comes from a survey conducted by a lender, which found that 45% of potential homebuyers would consider opting for a Sharia-compliant mortgage provider.
The interest in Sharia-compliant mortgages isn’t just about finance; it’s about ethics. Over one in three UK homebuyers (37%) are attracted to these options because they ensure their money isn’t used to support industries they may disagree with morally, such as tobacco, gambling, alcohol, adult entertainment, and the arms industry. Islamic mortgages, known as Home Purchase Plans, offer a way to invest in a home while staying true to these ethical standards.
Gatehouse Bank’s Innovative Approach
Gemma Donnelly, head of direct home finance at Gatehouse Bank, has highlighted the bank’s efforts to cater to this growing demand with competitive and ethical financial products, “We aim to make our ethical, Shariah-compliant products accessible to all, and hope our customers will make the most of our offering. Our green home finance products offer a reduced rental rate for customers purchasing a home with an energy efficiency rating of A or B, with Gatehouse Bank offsetting the carbon emissions generated by the average UK property for as long as the customer remains with the Bank with a qualifying property. This was an important provision for nearly half (48%) of respondents, who said they would opt for a provider who offered incentives for buying a property with a higher EPC rating.”
A Generational Shift in Attitudes
The survey also uncovered a significant generational divide in attitudes towards Sharia-compliant mortgages. A whopping 72% of 18–24-year-olds said they would consider a Shariah-compliant provider, in contrast to just 26% of those aged 65 and above. This points to a growing awareness and acceptance of Islamic finance among younger generations, who are increasingly looking to align their financial decisions with their ethical beliefs.
Lottie Dougill, head of intermediary sales at Gatehouse Bank, echoed this sentiment. She highlighted the importance of continuing to educate consumers about Shariah-compliant finance to dispel misconceptions and bridge knowledge gaps. With nearly half (47%) of 18-24-year-olds keen on ethical financial goals, there’s a clear demand for more information and access to these types of financial products.