Rise in appetite for finance aligning with Islamic principles, study shows

Forty-five per cent of UK homebuyers would consider using an ethical home finance provider that aligns with Islamic principles, a new study by Gatehouse Bank.

The Shariah-compliant challenger bank suggested that UK homebuyers are looking to make financial decisions that reflect their ethical commitments, with 69% of respondents also noting the importance of green and sustainable options when purchasing their home.

Gatehouse Bank’s research was based on a study of 1,000 UK homeowners and prospective buyers. The findings also showed that 37% of UK homebuyers are most attracted to Shariah-compliant home finance providers because they do not invest in unethical industries, such as tobacco, gambling, alcohol, adult entertainment, and the arms industry.

While the findings showed an overall willingness among UK consumers to explore ethical home finance products, Gatehouse Bank found that it was younger generations who were most familiar with Islamic finance.

More than seven in 10 (72%) of 18 to 24-year-olds said they would consider a Shariah-compliant provider, compared to just a quarter (26%) of those aged 65 and above. This was due to a persistent knowledge gap between generations, with 36% of those aged 65 and over remaining unaware that Islamic finance products are available to all, including those of all faiths and none.

“It’s fantastic to see growing awareness of Shariah-compliant finance amongst consumers, particularly in younger generations,” said head of intermediary sales at Gatehouse Bank, Lottie Dougill.

“However, there is still work to be done by finance providers and brokers alike. It is important to continue addressing any lingering misconceptions around Shariah-compliant finance and thus closing any potential knowledge gap so that homebuyers are aware of all their options and can take advantage of the benefits that Islamic finance has to offer.”

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