Discover top fintech news and events!
Subscribe to FinTech Weekly's newsletter
Read by executives at JP Morgan, Coinbase, Blackrock, Klarna and more
In a significant move to democratize Sharia-compliant property financing, UK-based Islamic fintech company Offa has revised its lending criteria. The firm now offers buy-to-let finance to first-time buyers and has lowered the minimum age requirement to 18. These changes aim to make ethical property investment more accessible to a broader audience.
Inclusive Financial Criteria
Offa's updated policies reduce the minimum annual income requirement for applicants to £18,000. The company has also streamlined its finance affordability assessments.
For terms under five years, customers will pay the standard rate plus 1%, while those opting for terms of five years or more will pay only the standard rate. This approach simplifies the financing process and makes it more transparent for potential investors.
Enhanced Opportunities for Portfolio Landlords
Recognizing the challenges faced by portfolio landlords, Offa has adjusted its stress testing methodology. Instead of relying on the standard variable rate, assessments will now be based on the average of current five-year fixed rates, currently at 6.6%. This modification is expected to provide more viable financing options for landlords managing larger property portfolios.
Expansion to Overseas Markets
In addition to domestic changes, Offa has expanded its services to British expatriates residing in Malaysia and Hong Kong. This initiative allows expats to access Sharia-compliant buy-to-let finance, enabling them to invest in UK property markets while adhering to Islamic financial principles.
Commitment to Ethical Financing
Offa's buy-to-let products are structured around Islamic finance principles, specifically co-ownership with leasing. This model ensures that transactions are free from interest (riba) and are conducted in a manner consistent with ethical investment standards. By broadening its criteria and simplifying its processes, Offa is making Sharia-compliant property financing more inclusive and attainable for a diverse range of clients.
These strategic changes reflect Offa's dedication to providing ethical and accessible financial solutions, catering to the evolving needs of property investors seeking Sharia-compliant options.
