The Intermediary – February 2026 - Flipbook - Page 11
SPECIALIST FINANCE
In focus
Aligning with
values-driven
customers
I
slamic finance, also known as
Shariah-compliant finance,
is a sub-sector of financial
services which has been
growing rapidly in recent
years and is predicted to
surpass $4tn in assets globally by 2030.
In the Western world, the UK has
emerged as a leader in this space,
with over 20 institutions, including
five fully Shariah-compliant banks,
now providing Islamic finance
products. This is more than any other
Western nation.
However, despite this promising
growth trajectory, there remain
lingering misconceptions about the
differences between Islamic and
conventional finance, as well as
who can access these products. For
example, according to Gatehouse
Bank’s latest ‘Islamic and Ethical
Finance Report,’ three in 10 (30%) of
UK consumers believe that Islamic
finance is only available to those of the
Muslim faith.
To ensure the industry can
reach its full growth potential and
that customers are aware of the
opportunities it could afford them,
it is important to address these
misconceptions and tackle the
knowledge gap.
Unlike conventional finance,
Shariah-compliant finance does not
pay or charge interest, as Shariah
principles state that money should
not be generated in and of itself.
Instead, funds must be put to a good
use to generate profit supported by
a genuine trade or business-related
activity. This is why Islamic savings
accounts offer an expected profit
rate, which is generated by the
profit made by carefully investing
customers’ deposits.
Additionally, we make sure that
the property finance we provide
and customers’ deposits are not
used to support harmful sectors
that are against Shariah principles.
These include industries such as
alcohol, tobacco, gambling, adult
entertainment and arms dealing.
Finally, as a Shariah-compliant
ethical bank, speculative investments
and transactions are prohibited and it
is important that in any venture, the
risk is always shared and mitigated.
As a result, all of our transactions
involve real assets, with this approach
encouraging trading and enterprise
that is stable and transparent.
Raising awareness
Shariah-compliant providers such as
Gatehouse Bank offer Home Purchase
Plans (HPPs), which are commonly
known as the Islamic alternative to a
mortgage. This involves the customer
and the Bank forming a partnership to
purchase the property together, with
the customer then paying monthly
acquisition payments and rent on the
share of the property they do not yet
own. Once all payments have been
made, full ownership of the property
is transferred to the customer.
At Gatehouse Bank, we also offer
a range of buy-to-let (BTL) Purchase
Plans which are available for UK
residents, UK expats and international
residents. These can be used by
prospective or existing landlords just
like a conventional mortgage to buy
or refinance property, with the final
outcome being the same.
Brokers do require additional
permissions to submit applications
for private home ownership through
a HPP, as this is a regulated activity.
At Gatehouse Bank, we are still
able to assist brokers without these
permissions to manage customers
seeking Shariah-compliant finance
by introducing the case to our direct
LOTTIE DOUGILL
is head of home finance
distributions at Gatehouse Bank
adviser (DA) team and providing
a reduced procuration fee as part
of the process. Permissions are not
required if a broker is submiing BTL
applications to us, as these products
are unregulated.
Despite the misconception
remaining that Islamic finance is only
available to those of the Muslim faith,
the sector is becoming increasingly
aractive to those from all faiths, or
none, due to it being guided by the
principles of transparency, fairness
and ethical venture. This is resonating
strongly with a society which is
becoming more values-driven and
looking to align their values with their
financial decisions.
According to our recent research,
nearly half (45%) of UK homebuyers
would consider using an ethical
home finance provider that aligns
with Islamic principles and over
one in three (37%) said that they
would be most interested in opting
for a Shariah-compliant provider
because funds aren’t invested in
unethical industries.
The rise of a more conscious way
of accessing finance will be key as
we move into 2026 and beyond to
ensure providers are still able to
deliver the home finance solutions
that suit the needs of homebuyers and
landlords alike.
Raising awareness, removing
misconceptions and working with the
Government to level the playing field
between Islamic and conventional
finance are all key components to
ensure it achieves its full growth
potential in the UK and in the wider
global market and, at Gatehouse
Bank, we aim to be part of driving this
change forward. ●
February 2026 | The Intermediary
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