FCA greenlights Offa for Home Purchase Plans

The Financial Conduct Authority has authorised Islamic property finance fintech, Offa to provide home purchase plans for customers across the UK.

The authorisation will soon allow Offa, which has been expanding rapidly via acquisitions, staff hires and product launches, to become the third active provider of HPPs in the market.

Since charging interest is forbidden in Islamic finance, a Home Purchase Plan involves the Islamic finance principles of co-ownership-with-leasing where customers acquire the property in partnership with Offa and make monthly payments to increase their share, over time owning it. Sharia-compliant BTL is based on the same principle except that those customers make payments from received rental profits.

Offa believes that this is the first licence by the FCA for a home purchase plan for a newly-authorised entity in more than seven years. It is another major accomplishment for Offa, the first Sharia-compliant bridging finance provider and the team that previously introduced the first Sharia-compliant buy-to-let product to the UK.

“This is a significant and hard-won milestone for us at Offa," comments Sultan Choudhury OBE, Executive Chairman 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.”

Riaz Husain, Chairman of Offa Money Ltd adds, “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.”