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| Britain |
| HSBC: Islamic mortgages attract interest |
| 2003-07-07 |
| Slowly but surely people. Time to wake up and smell the Shari'a. Lenders in the UK have been discouraged from providing Sharia compliant mortgages for the country's 1.8 million Muslims. However, following regulatory alterations announced by the Treasury, things could be about to change. HSBC [HBC] plans to launch an Islamic mortgage product and other high-street banks could now follow suit with mortgages and other financial services products. Banks in the UK have traditionally been discouraged from providing what are called Sharia compliant mortgages to the UK's Muslim population because they are more expensive than conventional products. Islamic law forbids the payment or receipt of interest and so a Sharia compliant mortgage relies on a financier to buy the property on behalf of the purchaser. The financier then sells the property on to the purchaser for a set price but in addition charges 'rent' for a specified period. This transferal of ownership from the owner to the financier and from the financier to the new owner means that the property changes hands twice instead of once and that stamp duty therefore has to be paid an additional time. Changes announced by the Treasury mean that the requirement to pay stamp duty twice will be removed, making Sharia compliant mortgages more competitive. HSBC looks like it will be the first to act on the regulatory changes, having announced that it will launch a Sharia compliant mortgage next month in 25 UK cities including Manchester, Bradford and Birmingham. If successful, the bank will roll out the trial across England and Wales. HSBC is not the first lender in the UK to offer a Sharia compliant mortgage. West Bromwich Building Society offers a product in partnership with the United Bank of Kuwait. However, it is the first major lender to offer its own product and the uptake rate is critical for the future of Sharia compliant mortgages in the UK. It is even possible that these developments could stimulate a new wave of interest in Sharia-compliant financial services products. Barclays is believed to be looking into the area and the newly formed Islamic House of Britain is set to apply to the Financial Services Authority for a banking licence. The provision of financial services products to the UK's Muslim population could be about to improve dramatically. Expect an even higher spike in Muslim immigration to nations who are stupid enough to alter banking laws to suit Islam. Instead of forcing them to change backward beliefs as a part of assimilation, the Western world is bending over backward to change its ways to accomodate Muslims. No wonder Usama and his ilk think America is ripe for take-over. Hell, Europe and the UK are falling without any real effort. First read at LGF in a comment posted by aaron. |
| Posted by:Celissa |