Associations pave way for Islamic shared ownership

A group of housing organisations in London are drawing up plans for a shared ownership scheme that could be used by Muslims.

At the moment Muslims in England, particularly in London and the South-east, are unable to buy a share in their own homes because Islamic law – Sharia – forbids them paying or receiving interest.

But Sutherland Housing, part of Genesis Housing Group, is working with Andrew Cowan, a partner at solicitor Devonshires, to develop a shared-ownership model that meets the stipulations of Islamic law.

Along with the Southern Housing Group, East Choice, Notting Hill Housing Trust, the North London Muslim Housing Association and Orbit Housing Group they are searching for backers to fund one of two possible models that could be Sharia-compliant.

Under one, an Islamic bank would provide funding to an association, which would then grant Muslim customers a shared-ownership lease. The second would involve an association leasing a property to a bank, which would then sub-lease the same property to a Muslim tenant.

Cowan said that agreement would be needed with the Housing Corporation about changes to the grant regime and with the Treasury on stamp duty.

However, he added: “There is willingness from all involved to make this product viable. Our aim is that our clients can then reach out to people who have been disadvantaged by the current regime.”

Mike Dunkley, managing director of Sutherland Housing, said: “Shared ownership tends to happen in London and the South-east, so we would hope that if we can get this scheme to take off we would greatly improve access to housing for Muslims living in these areas.”

Iqbal Asaria, chairman of the business and economic committee of the Muslim Council of Britain, welcomed the scheme.

He pointed out there were 41,000 Muslim households living in rented social housing in the UK, some of whom would want to buy a share in their homes but currently cannot.

“We would definitely be supportive of a fully compliant scheme, especially in London where shared ownership would seem to be the only option for some first-time buyers,” he said.