Mortgage Finance Gazette
The Try Adviser Network of mortgage brokers has been given permission by the FCA to advise on Shariah-compliant home purchase plans.
The network, which acts as a link between mortgage providers and advisers, applied for permission after it noticed increasing demand for the Shariah-compliant version of a mortgage.
It has been working with home purchase plan provider Gatehouse Bank, and its sales director, Roger Evans, to shape the offering.
Home purchase plans (HPP) differ slightly from traditional mortgages, where a buyer borrows a fixed amount from a bank to purchase a property and then pays this back with interest over a set term.
With HPPs, the bank and the buyer purchase the property in partnership and no interest is charged, as this is not permitted in Islamic finance.
Instead, the bank charges rent on the part of the property that the customer doesn’t yet own. The customer also pays an additional amount each month to gradually purchase the bank’s share of the property over a set period.
The Try Network will also offers customers buy-to-let purchase plans, which are a Shariah-compliant mortgage alternative for landlords where the additional HPP permissions are not required to provide advice to customers.
Martin Swann, managing director at Try Adviser Network, said: “We regularly speak to our appointed representatives to find out what they need to expand their businesses, and requests for HPP permissions have grown considerably in the past year.
“We have worked closely with Gatehouse Bank for several months, using their knowledge and experience of the HPP market to shape our proposition. We see them as central to our HPP offering in the years to come.”
Roger Evans, director of home finance distribution at Gatehouse Bank, said: “Try Financial are a valued business partner of Gatehouse Bank and I am delighted that they have taken the initiative to gain the Home Purchase Plans permissions with the FCA.
“This will allow their intermediaries to provide an even better level of service and support to their customers and meet the growing demand for Home Purchase Plans in the residential property market head on.
“This will be in addition to offering an ethical finance solution for landlords in the form of Buy-to-Let Purchase Plans, which do not require these consumer-focused permissions.
“This is a positive step that will further support the growth of one of the industry’s most innovative broker networks.”
