Muslims who want to buy a home loan in accordance with their religious beliefs face the prospect of paying much more in interest rates than if they took out a conventional mortgage.
A sharia-compliant loan is up to 9%, far above the 6% interest that standard mortgages are hovering around.
This can result in thousands of pounds extra being added to the lifetime price of a home, and has resulted in ethical dilemmas for many Muslims, says Josh Rankin of Tembo, a broker that deals in both sharia and traditional options. regular mortgages, despite a wish to get sharia, according to him.
In Islam, payment, or receiving, interest is not permissible, so that restricts a traditional mortgage for those who want to be fully compliant.
A sale and lease agreement for Sharia homes is called a sale and lease agreement. To avoid paying interest, the bank acquires the property with its customer as a freeholder or primary leaseholder, if it is a long-lease property. These are actually no-interest home purchase plans, although sometimes referred to as 'halal mortgages '.
The provider usually leases or sub-leases the property back to the homebuyer, who then pays rent on the part they do not own, plus increases towards buying the property.
The cash deposit and subsequent payments are legally presented in a partnership agreement, but structures differ.
The rent payment is reduced as the equity of the buyer grows. It's similar to a traditional mortgage, with interest payments replaced by rent.
Muslim buyers who take out an agreement require a large deposit, but the costs are high, he said.
Gatehouse Bank, the leading Islamic bank offering residential home finance products, requires a minimum deposit of at least 25 percent. On a property costing £320,000, you would need to put down a whopping £80,000.
A 25-year deal would cost between £508,200 and £534,300, depending on how long it is fixed, allowing the total cost of the property to be between £508,200 and £534,300.
If you took out a traditional mortgage on the same terms, you could pay between 5,000 and 5,000 a month with a traditional mortgage. If you couldn't raise the deposit, you could borrow more, subject to earnings.
The reason for the higher rates is that, for lenders, funding this type of scheme is more expensive, said Mohammed Saqub, head of Islamic finance at Shakespeare Martineau.
re a high street bank, you have depositors with funds in the billions, and it's a completely different ball game to a relatively new Islamic bank where the depositors aren't significant.
The financial conduct authority, the Financial Conduct Authority, recommends HPPs from non-financial institutions as an alternative for Muslim buyers, as the principles are the same as those of non-financial institutions.
StrideUp and Wayhome, both offer lower deposits at 15% and 5%, but are also more expensive than traditional mortgages.
StrideUp estimates said monthly payments on the same £320,000 property over 25 years were about £1,750.
Even if you've overcome the financial hurdles, there are strict criteria for the type of property that can be purchased, whether you choose a HPP from an Islamic bank or a non-financial institution. The discontinuation of products or waiting lists add further obstacles.
The company running the scheme might not finance certain houses - high-rises may be problematic as could shared ownership.
Mousir Syed, 40, wants a flat in a deal that involved a lease extension, but it didn't work out. And it fell through, he says.
The seller proposed a procedure that would allow Syed, as the buyer, to complete the extension process. The loaner and the leaseholder were also involved in the process, so the extra time involved in the process meant they would not have met the required deadline. Syed sought to negotiate a lower sale price for the shorter lease to reflect the shorter lease, but a deal could not be reached.
He found another property, this time with ownership as a share of the freehold - and turned to Al Rayan, the UK's largest Islamic bank. But because of the different financial arrangements to conventional mortgages, the other freeholders, who were not Muslim, questioned whether the bank could be a freeholder or whether there could be a separate leaseholder on the property.
When they wanted to sell, Syed said, they were also worried about any wider implications.
He recommended them to specialist solicitors to answer and clarification their questions, but the delay frustrated the seller, who pulled out.
Syed considered non-bank HPPs but decided it made more sense to keep renting, either riding out the high interest rates, which still affect the Islamic finance market, or waiting until property prices drop further to even out costs.
He said that he would not consider a traditional mortgage.
And I feel good about it, he said. I understand some of these alternatives aren't perfectly sharia but they're the closest thing we've got until we have something better, he said.
Tembo says the high rates it encounters in sharia-compliant options suggest the community is underserved.
Saqub says more competition in the space would drive down prices.