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Islamic Bank of Britain cuts B2L finance rates

The UK’s only wholly Sharia compliant retail bank Islamic Bank of Britain has slashed the rental rate for its Sharia compliant buy-to-let purchase plan product by 0.4 per cent.

The rate now stands at 4.49 per cent at 65 per cent LTV with an option to take a rent-only buy-to-let purchase plan. It also has a discounted variable rental product at 4.89% per cent for 75 per cent LTV. As a Sharia compliant product, the product differs from a mortgage where the customer borrows money from a lender which is then repaid with interest.

A buy-to-let purchase plan uses the Islamic finance principles of co-ownership with leasing where IBB and the customer buy the property as partners and the customer pays rent on IBB’s share in the property.

At the end of the discount period rental rates will revert to IBB’s Buy to Let Finance Rental Rate, which is currently 5.49%.

At the end of the term, when all acquisition payments have been made and the finance has been settled, ownership of the property transfers fully to the customer.

IBB’s head of sales and service Imran Pasha says landlords of all faiths and ethical beliefs can access the products.

He says: “Our recent rental rate reduction has been made in response to demand from investors keen to access affordable, Sharia compliant buy-to-let products which allow them to maximise the potential of the active rental market.”

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