Home-buying

Navigating the UK’s Halal Homebuying Options: A Discussion with Scholars

The recent 'Halal Homebuying Scholars Roundtable' hosted by Pfida brought together some of the leading Islamic scholars to explore halal mortgage options and other shariah-compliant paths to homeownership.

3 min read

By Kaynat C.

A family with house keys - Turkiye Roundtable Pfida Halal Home

For Muslims in the UK, finding a way to buy a home that aligns with Islamic finance principles is a common concern. The recent ‘Halal Homebuying Scholars Roundtable‘ hosted by Pfida brought together some of the leading Islamic scholars to explore halal mortgage options and other shariah-compliant paths to homeownership.

In this article, we will dive into the key points discussed during the roundtable, offering insights into the most ethical and practical ways for Muslims to achieve homeownership. If you haven’t watched the full discussion yet, you can view it:

Halal mortgages vs. conventional mortgages: What’s the difference?

One of the primary discussions during the roundtable was the distinction between conventional mortgages and halal home financing solutions. A conventional mortgage involves borrowing money with interest, which is considered riba (usury) and is strictly prohibited in Islam.

In contrast, halal mortgages, offered by Islamic banks in the form of home purchase plans, are structured to avoid interest. However, the scholars also noted that not all Islamic finance products are the same, and some have faced criticism from certain schools of thought.

The roundtable highlighted the importance of transparency and understanding when choosing an Islamic finance product.

Pfida’s shared ownership model: A halal solution

One of the most discussed halal homebuying solutions during the roundtable was the shared ownership model, which Pfida offers. In this model, the buyer and the finance provider typically co-own the property as partners. The buyer gradually purchases shares of the property over time as and when they wish, whilst paying rent on the remaining portion.

The scholars praised this model for its ethical structure, which not only avoids interest but also spreads risk and reward fairly between the parties. This makes shared ownership a practical option for Muslims looking to avoid riba while still pursuing homeownership.

House held in hands of child and adult - Pfida halal home

Key takeaways from the scholars

During the roundtable, the scholars shared several practical tips for Muslims in the UK:

Understand the contract: Make sure to fully understand the terms of any halal financing product, as transparency is key to ensuring shariah compliance.
Seek shariah-compliant savings options: If you’re saving for a home, consider halal investment accounts or savings options like Pfida’s Grow-Your-Savings account, which avoids interest-based banking.
Look beyond individual endorsements: Choose finance products that have been approved by a council of scholars, rather than relying on the endorsement of a single individual.

The Halal Homebuying Scholars Roundtable provided a wealth of insights into how Muslims can navigate the home-buying process in a way that aligns with their faith. With options like Pfida’s shared ownership model, it’s possible to achieve homeownership while avoiding riba and adhering to the ethical principles of Islamic finance.

Watch the full roundtable discussion here to gain deeper insights into the topics explored by our expert panel.

To learn more about Pfida’s halal home-buying solutions, click here.