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Buying to Let

Currently under the Financial Services Authority’s rules for Home Purchase Plans the majority of Manzil Buy to Let Home Purchase Plan transactions are not regulated. Please call us if you require further clarification.

We are very conscious that there are few investment opportunities for Muslims wishing to save and invest money in accordance with their faith. It is for this reason we allow Manzil Home Purchase Plans to be used for second or subsequent properties to be purchased purely as an investment.

Our Buy to Let Home Purchase Plans follow the widely and historically accepted Islamic financing methods of Ijara and Murabaha.

The terms that apply to buy to let properties are slightly different to our normal terms. (See linked page for full terms and conditions). The reason for this is because we believe that the risks to AUBUK are greater when a property is let as opposed to when a property is occupied as the main residence.

The basis of a buy to let investment is that the net rental income received from the property will be adequate to meet the monthly Manzil Home Purchase Plan payment.

We will not necessarily base our decision on the applicants income received, however we will of course require proof that the applicants are financially solvent and have a good credit history.

When calculating how much we can assist, we will use the forecast rental income, as assessed independently by our valuer. In circumstances where a property is already let, we will take the actual rent being paid.

The calculation of the amount we can assist with will vary from property to property, but as an indication, we are likely to apply the following rules:-

Gross rental income less 20 to 25%. We deduct 20 to 25% to allow for the following

• Managing agent charges
• Periods when a property may be empty or between lettings
• Service charges and ground rent if the property is leasehold
• Property maintenance expenses

After deducting 20 to 25% we would expect net rental income to be greater than the forecast Manzil Home Purchase Plan payment by at least 115%.

Key Features of Manzil Ijara Buy to Let

You can

• Purchase freehold or leasehold residential property in England and Wales, over a period of between 7.5 years and 25 years
• Obtain finance up to 75% of the property’s value
• Build a portfolio of properties
• Refinance (remortgage) from an existing standard interest mortgage (subject to the Banks terms and conditions)
• Refinance (remortgage) from an existing Islamic home finance product (subject to the Banks terms and conditions and receiving sanction from our Shari’ah Advisory and Supervisory Board.
• Sell the property when you wish
• Make full repayment of the outstanding balance at any time without any early repayment/redemptions fees (please note any repayments will be subject to account settlement fees)
• Make additional payments at each rent review, with no charge.
• Available to the self employed after appropriate checks have been carried out
• Available to UK and Non-UK residents, Trusts, legal corporate entities in the UK and abroad (Non-UK residents will need a UK Bank account)

But

• You cannot have further money advanced on the plan
• You cannot take payment holidays

Key Features of Manzil Murabaha Buy to Let

You can

• Purchase freehold or leasehold residential property in England and Wales, over a period of between 5 years and 15 years
• Obtain finance up to 75% of the property’s value
• Fixed monthly payment throughout the agreement term
• Property is registered in your name(s)
• Build a portfolio of properties
• Make full repayment of the outstanding balance at any time (subject to paying the remainder of the full purchase price and account settlement fees)
• Available for property purchases only
• Available to the self employed after appropriate checks have been carried out
• Available to UK and Non-UK residents, Trusts, legal corporate entities in the UK and abroad (Non-UK residents will need a UK Bank account)

But

• You cannot have further money advanced on the plan
• You cannot take payment holidays
• You cannot make additional payments
• You cannot refinance from an existing standard interest mortgage or Islamic home finance plan

To obtain monthly payment illustrations please click here.

To ensure you have the most up to date information available, we would be happy to provide you with a detailed illustration. Please contact us using the link above or call us on freephone 0800 783 3323.