Noaman Hasan, the UK head of HSBC Amanah Finance, said: “This was always on our radar as we have historically received many business introductions from brokers, so the pilot, which finishes at the end of May, involves a number of these smaller-sized firms working in ethnic markets.”
HSBC eventually intends to roll out its home finance product to all sectors of the broker market and is already in discussions with larger broking firms.
Under the scheme, the customer makes monthly payments consisting of rent and payments towards the purchase price, where HSBC owns the property until the customer has made the final payment as with conventional mortgages.
The payment of interest is forbidden under Islamic law, because it is profit from money with no exchange of goods, so rent is paid for use of the property. The property insurance, which is evidently a legal requirement, is not Sharia-compliant yet, but will be offered soon if the products, called ‘Takeful’ products, can successfully be translated to the UK.
HSBC became the first UK high-street bank to launch an Islamic home finance product and current account in July last year.
