Offa unveils Sharia-compliant buy-to-let finance service

UK-based FinTech Offa has introduced a new buy-to-let (BTL) finance service. This offering is designed to cater to both Muslim and non-Muslim property investors, providing fast funding decisions through a digital, paperless process. The launch marks a pivotal step in transforming the traditionally cumbersome world of Islamic finance.

Offa’s BTL service is powered by the latest software, ensuring a seamless and efficient application process.

“Offa is all about high-quality, modern service, and speed is crucial in real estate,” said Sagheer Malik, Offa’s Chief Commercial Officer and MD of Retail Finance. “With the launch of our ultra-quick buy-to-let service, combined with our team’s decades of industry experience, we are bringing Islamic finance into the 21st century, leaving behind the onerous paperwork and cumbersome systems that many customers have typically suffered in the past.”

The service is available to new and seasoned landlords who are British residents or UK expats. It employs the Islamic finance principle of co-ownership-with-leasing, allowing customers to gradually acquire property ownership without paying interest. Instead, customers make monthly payments to increase their share in the property over time.

One of the standout features of Offa’s BTL product is its flexibility in meeting affordability criteria. When a customer’s rental income falls short, Offa allows them to use their personal monthly income to make up the difference, a practice known as top-slicing. This feature ensures that more investors can qualify for the finance they need.

The service is open to anyone 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.

A modern approach to Islamic finance

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.

“Our streamlined digital application process, which is unparalleled in the Islamic finance market, means clients can potentially get a fair decision within minutes, depending on credit rating and risk criteria,” added Malik.

This modern approach not only simplifies the process but also makes it more accessible to a broader range of investors.

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