British Muslims are suffering a "financial faith penalty", as 80% stated that their home finance choices are restricted due to their faith, research by Offa has revealed.

The fintech’s report, From faith penalty to financial fairness: Unlocking the potential of British Islamic home finance, has called on Islamic home finance providers, brokers and policymakers to improve faith-aligned finance across the industry.

Unlike conventional finance providers, Islamic finance firms do not charge interest and avoid investments in sectors deemed harmful to society, such as the arms trade, animal testing, gambling, alcohol and tobacco.

Offa revealed that of the 24% of British Muslims who used Islamic home finance, 62% had to wait up to two weeks for a finance decision. A further 17% waited between 15 and 31 days, 16% waited more than a month and just 5% received a same-day finance decision.

The firm also reported that the three biggest challenges faced by British Muslims in terms of Islamic finance were long decision times (28%), excessive paperwork (22%) and poor customer service (19%).

Chief commercial officer and manging director of home finance at Offa, Sagheer Malik, said: "Property is the asset class of choice for many of the UK’s 3.87 million Muslims, both as a route to generational wealth and as a long-term financial foundation, yet our insightful research report reveals that British Muslims are being underserved and deterred by slow, outdated and opaque Islamic home finance provision.

"This is not a niche concern, in fact it goes to the heart of financial fairness and inclusion in modern Britain. Our research indicates that British Muslims both desire and deserve high quality, Sharia compliant home finance products that match mainstream standards on price, speed and simplicity."

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