Age and income requirements lowered to increase accessibility for property investors
Islamic property finance fintech Offa has updated its lending criteria, now allowing first-time buyers to access its Sharia-compliant buy-to-let finance.
The changes include a lower minimum age requirement of 18 and a reduced income threshold, aimed at increasing accessibility to ethical property finance.
BTL applicants now need a minimum annual income of £18,000. Affordability assessments have also been simplified, with customers on terms under five years paying the standard rate plus 1%, while those on five-year terms or longer will pay only the standard rate.
For portfolio landlords, Offa has adjusted its stress testing approach. Instead of using the standard variable rate, assessments will now be based on the average of current five-year fixed rates, currently 6.6%. The change is expected to improve financing options for larger portfolio clients.
In addition, Offa has expanded its overseas lending criteria, making its Sharia-compliant BTL finance available to British expatriates in Malaysia and Hong Kong.
“We strive to make our Sharia-compliant home finance available to the majority of people rather than just the richest among us, which means constantly working to make our services inclusive and affordable,” said Sagheer Malik (pictured), chief commercial officer and managing director of retail finance at Offa.
“This is an example of our actions speaking louder than our words, as we now accept first-time buyers for the first time, drop the minimum required age to 18, and make our stress testing more transparent, along with many other changes that make applying for our finance straightforward, quick and easy.”
Offa, which received £230 million in Sharia-compliant funding for its BTL product, continues to expand in the UK property market. It recently purchased Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio in a deal that includes more than 350 home purchase plans – marking the first time an Islamic home finance portfolio has been sold in the UK. In July last year, Offa launched its Sharia-compliant buy-to-let product.
Sharia-compliant buy-to-let finance is a property financing solution structured according to Islamic finance principles. Unlike conventional mortgages, it does not involve interest (riba), which is prohibited in Islam. Instead, it typically follows ethical financing models such as ijara, where the lender purchases the property and leases it to the borrower, who makes regular payments that include both rent and a contribution toward ownership. Another common structure is musharakah, a partnership model where the lender and borrower co-own the property, with the borrower gradually buying out the lender’s share over time. Sharia-compliant BTL finance also avoids investment in industries considered unethical under Islamic law, such as alcohol, gambling, and arms manufacturing.
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