A buyer from the Gulf who wants to finance a London purchase without a conventional interest-bearing mortgage has real choices in the UK. The country has had regulated Islamic banks for twenty years and their products are recognised by the tax system. Several of them offer Islamic home finance to customers who live in Saudi Arabia, the UAE and the wider GCC. The cost sits close to a specialist non-resident mortgage; the deposit is where a non-resident is tested.
Finance
Islamic home finance in the UK for Gulf buyers: how it works, who offers it, what it costs
How a Sharia-compliant home purchase plan works in the UK
A Gulf buyer can finance a UK home without interest through a home purchase plan, usually a diminishing musharaka with ijara, from Al Rayan Bank, Gatehouse Bank, Nomo or Ahli United Bank (UK). A non-resident should expect a deposit of a quarter to a third of the price, more for buy-to-let. The rental rate moves with conventional mortgage pricing and typically costs a little more than the cheapest conventional deal. Stamp duty is paid once, on the price, with the non-resident and additional-home surcharges still applying.
The bank does not lend you money at interest. It takes part in the purchase of the property and earns a return from your use of it. Three structures are used in the UK:
- Diminishing musharaka with ijara. The bank and you buy the property together, in proportions set by your deposit. You pay rent on the bank’s share and buy that share back in instalments over the term, so the rent falls as your ownership rises. At the end you own all of it. This is the structure behind most UK “home purchase plans”.
- Ijara alone. The bank buys and leases the property to you for the term; title transfers at the end. Less common for homes now, still used in some buy-to-let products.
- Murabaha. The bank buys the property and sells it to you at a disclosed profit, payable in instalments. Used for some commercial and short-term purchases.
Each product is certified by the provider’s Sharia supervisory committee, and the certification is published, so you can read the basis of the opinion before signing.
Who provides it to buyers living in the Gulf
The UK providers that work with non-resident and GCC-based customers, as their public product lists stood when this page was written:
UK Islamic finance providers serving Gulf buyers, October 2026
| Provider | What they offer | Note for Gulf buyers |
|---|---|---|
| Al Rayan Bank | Home purchase plans and buy-to-let purchase plans | The longest-established UK Islamic bank; products for UK residents, expatriates and international residents, including the GCC |
| Gatehouse Bank | Home finance and buy-to-let finance | Markets explicitly to UK expats and international residents; GCC applications are routine |
| Nomo (Bank of London and The Middle East) | UK property finance arranged digitally | Built for residents of the GCC states; the application runs from the Gulf |
| Ahli United Bank (UK) | Home finance for private clients | A long-standing Gulf-owned UK bank with GCC clients |
| Offa and other specialist firms | Buy-to-let and bridging finance on Islamic principles | Useful for portfolios and speed; check the regulated status of each firm |
Source: providers’ published product information, including Al Rayan Bank and Gatehouse Bank, 13 October 2026.
Products, criteria and the countries served change often. We introduce clients to the providers whose criteria fit the purchase, and the provider’s own current terms govern.
What an Islamic home purchase plan costs compared with a mortgage
Three things decide the cost: the deposit, the rental rate and the fees.
- Deposit. A non-resident buyer should expect to put in more than a UK resident: typically a quarter to a third of the price for a home purchase plan, and often more for buy-to-let, where the rent the property can earn also has to cover the bank’s rental charge with a margin.
- Rental rate. The rent on the bank’s share is set by reference to market rates and moves broadly in line with conventional mortgage pricing. In most periods an Islamic product costs a little more than the cheapest conventional deal and about the same as a specialist non-resident mortgage. Fixed-rent periods of two to five years are offered.
- Fees. An arrangement fee, a valuation fee, and your own and the bank’s legal costs. Because the bank is a co-owner, the legal work is heavier than for a mortgage, and solicitors who know the structures should be used.
Stamp duty and tax on UK Islamic home finance
The tax system treats Islamic finance like a mortgage where it matters. Stamp Duty Land Tax relief for alternative finance means the bank’s purchase and your arrangement are not both taxed: you pay once, on the price, at the ordinary rates, including the surcharges that apply to you as a non-resident and as an owner of other homes. The rent you pay the bank is treated like mortgage interest for the main tax purposes, including the restrictions on relief for landlords. Our stamp duty guide sets out the surcharges in full.
Documents the bank asks for on an Islamic home finance application
The same file a conventional lender wants, prepared to a higher standard because you are abroad: a certified passport, proof of address in the Gulf, six months of bank statements, proof of income or of the business behind it, and the source of the deposit with documents. For buy-to-let, the expected rent and the letting agent’s confirmation. We assemble this once, at the start, and share it with the solicitor so the purchase and the finance complete together.
Related guides: Buy-to-let mortgages for non-residents, Cash or finance and Buying London property from Saudi Arabia.
Sources: Al Rayan Bank · Gatehouse Bank · SDLT manual: alternative property finance relief (HMRC). Written 13 October 2026 from the providers’ published product information. Fortune One Capital introduces clients to regulated finance providers and does not itself arrange or advise on regulated finance; the provider’s terms and its own advice govern. Figures verified 13 October 2026.
Frequently Asked
Questions about Islamic home finance in the UK
Yes. Buy-to-let purchase plans exist for exactly that and are the product most Gulf investors use. The bank assesses the rent the property will earn as well as your own position.
Some providers finance UK limited companies for buy-to-let; most want the directors as guarantors. The stamp duty position for a company differs, so the structure is decided with the tax adviser before the finance application.
Yes. You buy the bank’s remaining share. Fixed-rent periods usually carry an early settlement charge, as fixed mortgages do; outside those periods, settlement is at the outstanding balance.
Most use diminishing musharaka with ijara. The bank and you buy the property together, in proportions set by your deposit. You pay rent on the bank’s share and buy that share back in instalments over the term, so the rent falls as your ownership rises. At the end you own all of it. The bank does not lend money at interest; it earns a return from your use of the property.
Al Rayan Bank, the longest-established UK Islamic bank, serves expatriates and international residents including the GCC. Gatehouse Bank markets to UK expats and international residents, with GCC applications routine. Nomo, from Bank of London and The Middle East, is built for GCC residents and runs the application from the Gulf. Ahli United Bank (UK) offers home finance for private clients. Products and countries served change often.
More than a UK resident: typically a quarter to a third of the price for a home purchase plan, and often more for buy-to-let, where the rent the property can earn also has to cover the bank’s rental charge with a margin.
The rent on the bank’s share is set by reference to market rates and moves broadly in line with conventional mortgage pricing. In most periods an Islamic product costs a little more than the cheapest conventional deal and about the same as a specialist non-resident mortgage. Fixed-rent periods of two to five years are offered.
No. Stamp Duty Land Tax relief for alternative finance means the bank’s purchase and your arrangement are not both taxed. You pay once, on the price, at the ordinary rates, including the surcharges that apply as a non-resident and as an owner of other homes. Our stamp duty guide sets out the surcharges in full.
An arrangement fee, a valuation fee, and your own and the bank’s legal costs. Because the bank is a co-owner, the legal work is heavier than for a mortgage, and solicitors who know the structures should be used.
The same file a conventional lender wants, prepared to a higher standard because you are abroad: a certified passport, proof of address in the Gulf, six months of bank statements, proof of income or of the business behind it, and the source of the deposit with documents. For buy-to-let, the expected rent and the letting agent’s confirmation.
