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Buying Your Home with Manzil

Working in unison with our Shari’ah Board we have developed two ways to help you buy your home in accordance with Shari’ah, following the long established Islamic financing principles of Ijara and Murabaha.

Ijara and Murabaha are two of the most common methods of providing Islamic finance in the world and are considered by practitioners of Islamic banking and scholars to be the most suitable methods for the purchase of property in the UK.

Described simply, Ijara and Murabaha operate as follows:-

Ijara

• Under Ijara the bank will buy and own your chosen property.
• We then sell it to you for the same price with payment spread over a period of between 7.5 and 25 years.
• While you are buying the property from the bank we will also charge you rent for living in a property we own.
• The bank therefore makes its profit from the rent we receive from you and, once you have paid us the full purchase price, the property will become yours.

See the linked page for further details of Ijara.

Murabaha

• Under Murabaha the bank will buy the property from the seller for the original price and then sell it to you for a higher price.
• The higher price can be paid monthly to the bank over a period of between 5 and 15 years.
• The bank therefore makes its profit from the higher sale price of the property.

See the linked pages for further details of Murabaha.

The simple aim of Manzil Home Purchase Plans is to allow Muslims to buy property without taking a traditional style loan from a high street bank or building society. However, it should be remembered that the bank is a financier and we do need to make a profit.

So why is this any different from interest?

Since the bank still receives a profit, we are often asked why Ijara and Murabaha are considered any different from interest.

With a ‘conventional’ interest based mortgage, the lender advances funds to the borrower and charges for the use of their money. This is interest.

With Manzil Home Purchase Plans however, the bank’s position is different. Under both Ijara and Murabaha the bank puts itself in the position of owner of the property. The risks we assume, as owner of the property, are different to the risks of a ‘conventional’ lender, who never own the property.

Therefore, while the profit you pay us might be similar in amount to an interest mortgage, under Ijara we receive rent from a lease and under Murabaha we simply receive a higher price for the property, as agreed in the Murabaha Contract. These sums are not interest.

Please email us using the link above or call us on Freephone 0800 7833323 for more information about costs. Please note that calls may be recorded for monitoring and training purposes.