Buy to Let mortgage alternative from Islamic Bank of Britain (From Asian Image)

Buy to Let mortgage alternative from Islamic Bank of Britain

9:44am Thursday 1st December 2011 in Business

Islamic Bank of Britain plc has entered the Buy to Let mortgage market with the launch of its Sharia compliant Buy to Let Purchase Plan (BTLPP). Landlords looking for ethical and Sharia compliant finance can access IBB’s BTLPP with a deposit of 25%.

IBB’s BTLPP is a variable rate product available at a rental rate of 5.49% with an arrangement fee of 1%. Further features of the product include: • Finance for landlords with a portfolio of up to five properties.

•The ability to make additional payments.

•The ability to clear the finance in full at any point without an Early Payment Charge.

•Finance available from £70,000 and up to £500,000 per property.

•IBB’s BTLPP is available directly through the Bank’s branches, contact centre and intermediaries.

Sultan Choudhury, managing director of IBB said, “Buy to Let is proving to be popular with investors again. Rental yields are increasing and property is seen as a good long-term investment.

"IBB’s Sharia compliant Buy to Let Purchase Plan will help fuel this growing sector by catering for landlords looking for Sharia compliant finance. IBB anticipates a strong demand for the newly launched product".

As a Sharia compliant product, IBB’s BTLPP is based on joint ownership and rent. The customer and the Bank buy the property jointly. The monthly payment increases the customer’s share in the property and includes rent on the share that the Bank owns. At the end of the term the customer will own the property outright.

The source of funds for IBB’s BTLPP is 100% Sharia compliant. IBB does not use any interest bearing instruments like bonds or derivatives. Instead it uses its own funds and deposits from customers, all managed entirely in accordance with ethical and Sharia principles.