alburaq launches Islamic home finance range

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by Gill Montia

The Arab Banking Corporation has launched a new home finance range in the UK, via its “alburaq” brand, which is marketed through the bank’s London subsidiary, ABC International Bank plc.

Working in line with Islamic principles, alburaq claims that its home loans can be cheaper and more accessible than those of other lenders.

The Shari’ah-compliant products offer rates from the equivalent of 5.49% plus a promise from alburaq chief, Keith Leach, that if rates continue to fall as predicted, many customers could be paying the equivalent to 4.5% or less from March.

Mr Leach explains that margins on alburaq’s loans are fixed and there are no “collars” or “floor” in its small print, below which rates will not fall.

In addition, incentives such as assistance with fees or cashback offers do not come with penalties for borrowers who want to switch and unlimited overpayments are allowed.

All alburaq products are reviewed by a Shari’ah Supervisory Committee and the lender’s offering includes a range of buy-to-let loans.

Islamic finance has been gaining ground in the UK during the credit crisis, its ethical principles having offered protection from the huge losses seen by some mainstream banks.

Last year, the Islamic Bank of Britain, the UK’s first Islamic financial institution to be authorised by the Financial Services Authority as a retail bank, announced its intention to build a presence in Birmingham.

Meanwhile, Noor Islamic Bank, which is based in Dubai said it was seeking to acquire controlling stakes in UK and European financial institutions with the aim of becoming the world’s largest Shari’ah lender within five years.