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Complying with Islamic Finance Principles, Offa Launches Buy-to-Let Offering

Offa, the Sharia-compliant bridge finance fintech, has launched a new service in accordance with Islamic finance principles. Muslim and non-Muslim property investors will now be able to make fast funding decisions via a paperless process as a result of its buy-to-let (BTL) finance offering.

Muslims cannot charge interest and investment into sectors deemed harmful to society – such as alcohol, tobacco and the arms trade. However, Offa provides an ethical financial model which means Muslims do not find themselves stuck financially.

With its flexible property finance solutions and end-to-end digital processes, Offa is aiming to disrupt and transform the traditionally old-fashioned and cumbersome world of Islamic finance. Its new BTL products are available to new and seasoned landlords who are British residents or UK expats.

Instead of using interest, Offa’s BTL product involves the Islamic finance principles of co-ownership-with-leasing. Customers acquire the property in partnership with Offa and make monthly payments to increase their share, over time owning it.

Another key feature of Offa’s BTL product is that where a customer’s rental income is not sufficient for the required affordability criteria for the BTL finance, Offa allows them to make up the difference with their personal monthly income (commonly known in the industry as top-slicing).

The service is available to anyone purchasing property in England and Wales aged 21 or over where the property’s value is between £60,000 and £1million. First-time landlords can also apply, and Offa’s BTL solutions are also available for houses in multiple occupancy (HMOs).

Diversifying financial propositions at speed
Sagheer Malik, Offa’s chief commercial officer and MD of retail finance
Sagheer Malik, chief commercial officer and MD of retail finance, Offa

Sagheer Malik, Offa’s chief commercial officer and MD of retail finance said: “Offa is all about a high-quality modern service and speed is crucial in real estate. With the launch of our ultra-quick buy-to-let service, combined with our teams’ decades of industry experience, we are bringing Islamic finance into the 21st century, leaving behind the onerous paperwork and cumbersome systems that many customers have typically suffered in the past.

“Our streamlined digital application process – which is unparalleled in the Islamic finance market – means clients can potentially get a fair decision within minutes, depending on credit rating and risk criteria.”

In April, Offa announced a £100million credit line for its bridge finance arm from a fund managed by UAE-based Gulf Islamic Investments Group (GII). The credit line is the largest of its kind outside of the Gulf, creating significant capacity for the Birmingham-headquartered business to expand and diversify its financial propositions in the UK property market.

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