View more on these topics

Ansar partners property purchasers

Ansar Housing has revealed the development of its Property Purchase Agreement, a form of contract that is free of interest and that accords with Islamic principles of contract law.

Under the Property Purchase Agreement, Ansar and the client will form a partnership under which both parties jointly purchase a property.

The home-buying client will then rent the property under a separate tenancy agreement for a specified period of time.

During the tenancy, the client can purchase some or
all of Ansar’s share in the property at market value.

Upon purchase of Ansar’s final share in the property, the client will become the full owner and rental payments will cease.

Both the returns enjoyed by Ansar and the financing costs incurred by home buyers will be linked to the performance of property prices and rental yields over the term of the contract.

Among the benefits of this approach is that a home buyer cannot experience “negative equity” in the event of a default.

In a wider economic context, because the financier’s asset is a share of the property, not a sum of money owed by its client, this form of risk sharing contract could bring greater stability to the United Kingdom property market if adopted more widely.

Financiers who are exposed to the risk of a fall in property prices would tend to be more cautious in their lending practices.

In the first three years after its availability, Ansar plans to finance up to 200 properties in the United Kingdom.

The average rental rate on its contract is expected to be between 6 and 7% per annum fixed for the term of the agreement. Terms can range from 7 to 20 years.

In view of the fact that Islamic home financing activities are to be brought within the regulatory supervision of the Financial Services Authority in the future, Ansar Housing Limited intends to apply to the FSA to become an authorised person.


Richard Griffiths should do the decent thing on renewals

From Kevin Thornton Richard Griffiths (Mortgage Strategy August 29) should indeed do the decent thing. Should he instruct Network Data to pay brokers renewal commission? Yes. What will his answer be? Nope. He should hand over the outstanding commission instead of trying to blackmail brokers to join his network. Do the decent thing, Richard.

Too many firms not up to scratch on sub-prime, reveals FSA

The Financial Services Authority has revealed that its compliance review of small mortgage brokers advising on sub-prime found too many cases where firms were unable to show that they had followed the required procedures relating to suitability.Three firms were identified as potentially assisting customers to obtain a mortgage where their income would not meet the […]

Cameron backs Prescott plan

Tory leadership hopeful David Cameron has questioned opposition to deputy prime minister John Prescott’s house-building plans. Speaking in Devon, Cameron focussed on the poor quality of life in built-up areas. He says: “It’s a scandal that in the fourth richest country in the world, we tolerate conditions that would have been unacceptable 50 years ago.”

I want a simple illustration from the BMS website

From Sean Horton Back in April I needed to produce a BM Solutions KFI for a client so I went to its website looking for the KFI button. After clicking around for a few minutes it became apparent that the only way to get a KFI was to complete a DIP. I did not wish […]


Guide: what you need to consider for your auto-enrolment project

In this guide, Johnson Fleming reveals what items you need to understand to gauge the impact of auto-enrolment on your business. The guide focuses on: the impact that your auto-enrolment scheme will have on you; assessing your workforce; understanding your staging date; reviewing your current provision; and modelling contribution levels and costs.


News and expert analysis straight to your inbox

Sign up