Fatwa ID: 04771

Answered by: Maulana Shadman Ahmed

Question

I hope you are well by the grace of Allah; my question is regarding the purchase of a property in the UK. I and my wife recently received the offer to purchase our council flat, which we live in London with the RTB (right to buy) discount of over £100,000. We needed to borrow another £138,000 in order to purchase it, which we tried to do through any of the Islamic mortgage lenders (i.e. Al Rayan etc); however, they refused to do so on the basis that it was a council property and also because they don’t cover RTB purchases, borrowing from family and friends wasn’t an option either. So we reluctantly borrowed from a conventional non-Islamic mortgage lender.

Now sometime later, we have considered purchasing another property, which we’d like to rent out. We would like to purchase the new property by borrowing from an Islamic mortgage lender since the new property meets their requirement for borrowing.

Is it permissible for us to go ahead and use the Islamic mortgage lender (most probably Al Rayan bank) to purchase the new property?

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

Yes, it is permissible to buy another property using Islamic Finance. As for Al Rayan Bank, Darul Ifta Birmingham’s stance on Al Rayan Bank is as follows: 

“The conclusion of Darul Ifta Birmingham is that Al Rayan Bank’s mortgage scheme should be avoided, but it is better than going to a normal non-Islamic bank. One should avoid it but as a LAST and FINAL resort (i.e. this mortgage stands against another non-Islamic bank’s mortgage”.

You can read more details in the following Fatwa http://daruliftabirmingham.co.uk/al-rayyan-housing-scheme/

Only Allah knows best

Written by Maulana Shadman Ahmed

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham