Al Rayan Bank launches buy to let purchase plans in Scotland

Al Rayan Bank launches buy to let purchase plans in Scotland

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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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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