The Financial Conduct Authority (FCA) has authorised Islamic fintech firm Offa to provide Shariah-compliant alternatives to conventional residential mortgages for customers in the UK. 

The authorisation means the Islamic property finance fintech will soon become the third active provider of home purchase plans (HPPs) in the UK market.  

Offa says this is the first licence by the FCA for a HPP for a newly-authorised entity in over seven years.

Sultan Choudhury OBE, Executive Chairman at Offa, said: “This is a significant and hard-won milestone for us at Offa. The real winners of course will be our customers, who will now gain greater access to our fast and easy Islamic home finance services thanks to our modern, tech-driven and paperless systems. 

“By combining our teams’ decades of industry experience with the latest technology, we are bringing Islamic finance into the 21st century, leaving behind the onerous paperwork and cumbersome systems that many customers have typically had to suffer in the past Gaining this important authorisation is another step toward achieving that.” 

Founded in 2019, Offa is the UK’s first Shariah-compliant bridging finance provider. It also introduced the first Shariah-compliant buy-to-let (BTL) product to the UK. 

HPP’s— the halal alternative to mortgages

Since charging interest is forbidden in Islamic finance, a Home Purchase Plan (HPP) applies the Islamic finance principles of co-ownership-with-leasing. In this arrangement, customers acquire the property in partnership with the lender and make monthly payments to gradually increase their ownership share until they eventually own the property outright.

Offa says faith is at the core of its vision, brand and service. It provides an ethical finance model designed in accordance with Islamic finance principles. It means not charging interest and investment into sectors deemed harmful to society – such as alcohol, tobacco, animal testing, and the arms trade. 

Riaz Husain, Chairman of Offa Money Ltd, said: “Receiving this authorisation from the FCA will provide reassurance to our customers that Offa is adhering strictly to regulations as we provide high quality, faith-based Islamic home finance products to aspiring property investors and landlords across the country.” 

Offa recently acquired Bank of Ireland’s Alburaq Shariah-compliant home finance portfolio in a deal utilising a unique funding structure, including more than 350 home purchase plans. 

Gulf Islamic Investments took a majority stake in the Birmingham-headquartered company in 2022. And the organisation’s experienced senior team are among the leading names in UK Islamic finance.