Landlords

Al Rayan Bank launches buy to let purchase plans in Scotland

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10th January 2017

Al Rayan Bank has announced the launch of Sharia compliant Buy to Let Purchase Plans (BTLPPs) for the Scottish market.

The announcement comes just one month after establishing its presence as the only wholly Sharia compliant retail bank in Scotland and will enable Scottish landlords to benefit from occupancy payment rates as low as 2.99%.
 
The occupancy payment rates for  BTLPPs in Scotland are as follows:

•  35% deposit contribution (65% finance to value): fixed occupancy payment rate of 2.99% and discounted variable occupancy payment rate of 3.19% until 31 December 2018

•   25% deposit contribution (75% finance to value): fixed occupancy payment rate of 3.39% and discounted variable occupancy payment rate of 3.49% until 31 December 2018
 
Following the fixed or discounted period, all occupancy payment rates will revert to the Al Rayan Bank Variable Occupancy Payment Rate. For BTLPP products this is currently Bank of England Base Rate (BBR) plus 4.99%.

Unlike conventional buy to let mortgages, where the landlord borrows money from a lender and pays it back with interest, Al Rayan Bank’s buy to let customers in Scotland will buy their properties using the Islamic finance principle of co-ownership (Musharaka), purchasing the property together with the Bank, as partners.  Each month they will make an acquisition payment which will increase their stake in the property. They will also pay an occupancy payment under a co-beneficiaries agreement for use of the Bank’s share of the property. At the end of the finance term, when all payments have been made the customer will have sole ownership of the property.
 
Sultan Choudhury, Al Rayan Bank CEO, had this to say: “We’re delighted to continue the momentum of our successful launch in Glasgow with the announcement of Buy to Let Purchase Plans for Scotland.  Islamic buy to let property finance is an important addition to the Scottish market and will provide landlords with a practical alternative to conventional, interest-bearing, property finance products; one that will not compromise their values or faith.”

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