UK-based financial technology (FinTech) company, Offa, has recently launched a pioneering buy-to-let (BTL) finance service with the aim of revolutionizing Islamic finance. This service is tailored to meet the needs of both Muslim and non-Muslim property investors, offering prompt funding decisions through a digital, paperless process.
According to Sagheer Malik, Offa’s Chief Commercial Officer and MD of Retail Finance, the company is committed to delivering a high-quality, contemporary service with a primary emphasis on speed, a crucial factor within the real estate industry. With the introduction of their rapid buy-to-let service, Malik believes that Offa is modernizing Islamic finance by eliminating the burdensome paperwork and complex systems that have been a challenge for customers in the past.
This innovative BTL service, enabled by cutting-edge software, is available to both new and experienced landlords who are British residents or UK expatriates. It operates under the Islamic finance principle of co-ownership-with-leasing, enabling customers to gradually acquire property ownership without incurring interest. Instead, they make monthly payments to increase their share in the property over time.
A notable feature of Offa’s BTL product is its flexibility in meeting affordability criteria. The company permits customers to use their personal monthly income to cover any shortfall in rental income through a practice known as top-slicing. This feature ensures that more investors can qualify for the finance they need, making the service accessible to a wider range of investors.
The service is open to individuals purchasing property in England and Wales, aged 21 or over, with property values ranging from £60,000 to £1 million. It is also accessible to first-time landlords and those with houses in multiple occupancy (HMOs). Offa’s ethical finance model, which avoids charging interest and investing in sectors deemed harmful to society, such as alcohol, tobacco, and the arms trade, aligns with Islamic finance principles.
In April, Offa secured a £100 million credit line for its bridge finance arm from a fund managed by UAE-based Gulf Islamic Investments Group (GII). This credit line, the largest of its kind outside the Gulf, provides significant capacity for Offa to expand and diversify its financial propositions in the UK property market.
Malik further emphasized that their streamlined digital application process sets them apart in the Islamic finance market, potentially providing clients with a fair decision within minutes, depending on credit rating and risk criteria. This modern approach not only simplifies the process but also makes it more accessible to a broader range of investors.
In conclusion, Offa’s Sharia-compliant buy-to-let finance service is poised to transform the landscape of Islamic finance in the UK. The company’s commitment to innovation, efficiency, and ethical financial practices reflects a significant milestone in the evolution of the property investment market. With its forward-thinking approach, Offa is positioned to become a key player in the modernization of Islamic finance, providing an accessible and streamlined solution for property investors across the UK.