There is a loyal customers base waiting for brokers who embrace the needs of the Islamic mortgage sector
Islamic mortgages may be regarded as a niche market but they offer opportunities for brokers who work close to large Muslim populations, especially to those who understand the products and the sector.
As with all areas of lending finance for Islamic mortgages suffered in line with the market downturn. A lack of confidence, funding and a reassessment of risk with lower LTV criteria have all contributed to consolidation in what was a growing area of mortgage broking and lending. loans for Islamic lender Alburaq and there was a dedicated resource to brokers referring clients to Alburaq’s team in London.
In April 2007 Alburaq forecast that Islamic lending would exceed £1bn by 2009 and said it was considering funding loans itself. This never came to fruition.
One lender increasing its presence in this sector is HSBC but it could hardly be described as the intermediary’s friend.
Brokers must appreciate and learn what is behind the culture as well as the religious commitment
This leaves only one committed intermediary lender in this sector – Islamic Bank of Britain – which has the benefit of investment from its founding shareholder Qatar International Islamic Bank.
IBB was established in 2004 and is a Sharia-compliant retail bank. This latest investment will enable IBB to move forward and secure its position as the brokers’ friend.
New products and enhanced criteria including higher LTVs have been announced. But it’s important brokers understand the sensitivities associated with Islamic mortgages.
There are an estimated 2.4 million Muslims living in the UK, many of whom are working in a professional sector, and brokers must appreciate and learn what is behind the culture as well as the religious commitment.
IBB offers training to ensure a full understanding of the market and there are competitive proc fees for packaged or introduced cases.
The important thing to remember is that this sector is growing through difficult times.
Brokers will find this sector interesting and it will provide them with a loyal client base who will be keen to recommend knowledgeable and sensitive advisers to members of their community.