Disclosure: Ziyad Finance is not a scholar and does not issue rulings. We receive no fee from any provider named in this article. This is education, not advice and not a fatwa.
Last updated: 12 September 2026.
Quick answer: A regulated UK Home Purchase Plan is a purchase and a lease, not a loan: the provider buys a share of the house, you rent that share and buy it back. Every UK provider is certified by a Shariah board (Amanah Advisors for StrideUp and Offa, Gatehouse's and KFH's own boards). The rent is benchmarked to Bank Rate, which the majority of scholars accept as a pricing reference and a minority reject as a device. That disagreement is real, and the answer to "is it halal for me" is to take the contract to your own scholar. If your question is about a conventional mortgage instead, read Is a mortgage haram?
"It's just interest with a different name." If you have told a relative you are looking at a halal mortgage, you have heard it. This article does not tell you what to believe. It shows you what the contracts actually say, why the rent is priced the way it is, who has certified each provider, and where the disagreement sits, so that the conversation you have with your own scholar is an informed one.
Two contracts, side by side
A conventional mortgage. You borrow £270,000. You owe £270,000 plus interest. The bank owns a debt with your name on it, secured on the house. Interest is a charge for the use of money over time, which is the core of what the classical sources call riba.
A Home Purchase Plan. The provider buys 90% of a house and you buy 10%. You hold a lease over the provider's share and pay rent for using it. Each month you also buy a slice of that share, so the rent falls as your share grows. At the end the provider transfers its last slice to you and the lease ends. No money is lent at any point. The provider owns a share of a specific property, not a debt.
The structure has two names. Diminishing musharaka is the shrinking partnership. Ijara is the lease. Every regulated UK provider, Gatehouse, StrideUp, Offa and KFH, uses both.
They are different in law as well as in name. Regulated Home Purchase Plans sit in the FCA's mortgage conduct rules as a distinct product, and they have their own stamp duty rules (the alternative property finance provisions of the Finance Act 2003), which exist precisely because the transaction is legally a purchase by the provider followed by a purchase by you.
So why does the rent track Bank Rate?
This is the question that decides most people's view, so it deserves a straight answer.
Rent has to be priced somehow. A landlord looks at what similar homes let for. A provider funding thousands of homes needs a reference that is transparent, published and understood by both sides, and Bank Rate is that reference. StrideUp's variable rate is literally Bank Rate plus 4.24%. Gatehouse and Offa fix their rates for two or five years against the same market.
The position accepted by every UK provider's Shariah board is that using an interest rate as a benchmark for pricing is permitted, provided the contract itself is a real sale and a real lease and no interest is charged on money. A benchmark is a reference point, not the substance of the transaction. The common analogy is a halal butcher who prices lamb by looking at what the supermarket charges: the reference does not change what is being sold.
The counter-argument, held by a minority of scholars, is that if the outcome mirrors a mortgage closely enough, the form is a device and the substance is riba. That view is real and it is held by serious people. We are not going to pretend otherwise.
What is actually different in the contract
If you want to test the "device" argument for yourself, these are the points where a Home Purchase Plan behaves differently from a loan.
No debt is created. You are not a borrower. You are a co-owner and a tenant of the rest. If you sell, you settle the provider's share on the terms in the contract; there is no loan balance to redeem.
The rent is for a specific asset. It is a charge for using a real house you are buying, not for using money.
The provider owns bricks, on its own balance sheet. That is expensive, which is one reason the rate is higher than a mortgage rate, and it is the substance of the partnership.
A Shariah board audits the operations, not just the brochure. Amanah Advisors (Mufti Faraz Adam) certifies StrideUp and Offa and audits their compliance. Gatehouse has its own Shariah Supervisory Board. KFH has the Kuwait Finance House board. Certification covers the contracts, the funding, and what happens in arrears and on sale.
What is not different: the monthly number. That is by design. The provider has to be competitive with a mortgage or nobody would use it. A similar price for a different contract is the point, not evidence against it. Halal mortgage vs conventional has the figures.
Who certifies what
| Provider | Shariah certification | Structure |
|---|---|---|
| Gatehouse Bank | Gatehouse Shariah Supervisory Board | Diminishing musharaka and ijara |
| StrideUp | Amanah Advisors (Mufti Faraz Adam) | Diminishing musharaka and ijara |
| Offa | Amanah Advisors (Mufti Faraz Adam) | Co-ownership and lease |
| Kuwait Finance House | KFH Shariah Supervisory Board | Commodity murabaha direct; ijara plan via broker |
One structural note. KFH's direct product uses commodity murabaha (tawarruq): the bank buys a commodity, sells it to you on deferred payment, and you sell it for cash to fund the purchase. Tawarruq is accepted by many scholars and rejected by others, including the OIC International Islamic Fiqh Academy in its organised form. If that matters to you, KFH's ijara plan through a broker uses the same co-ownership structure as the other three.
What we can and cannot tell you
What we can tell you. What the contracts say. Which board certified them. Why the rent is priced the way it is. Where the disagreement is and who holds which view.
What we cannot tell you. Whether it is halal for you. Ziyad Finance is not a scholar and does not issue rulings. Anyone in a comment section who tells you a product is definitely halal or definitely haram is being more certain than a qualified mufti with the contract in front of them would be.
What to do with that. Take the provider's Shariah certificate and its terms to the scholar you trust. Ask specifically about benchmarking and about the arrears terms, because those are where the disagreement lives. Then decide. That is not a cop-out. It is the rule.
Frequently asked questions
Is a fixed rate halal mortgage more or less halal than a variable one? Neither. The fix is a pricing term for the rent. The structure is the same.
If it is halal, why do Islamic banks charge more? Because they fund plans from savings that pay 4% to 5%, own property on their balance sheet, and run two contracts per home for a small market. The higher rate is a cost of the structure, not proof that it is a loan in disguise.
What about the unregulated options like Pfida? Pfida is Shariah-certified and says it prices its rent from market rents rather than Bank Rate, which some people prefer. It is not an FCA-regulated Home Purchase Plan, so you do not get FCA conduct rules or the Ombudsman, and it runs a long waiting list. That is a trade-off, and it is yours to make.
Is renting for the rest of my life the safer religious choice? Some people decide that, and it is a legitimate decision. It has a cost: rent paid to a landlord buys nothing, while the rent paid to a provider sits beside payments that buy the house. Whether that difference matters is, again, a question for you and your scholar.
Does a halal mortgage have the same legal protection as a mortgage? Yes. Regulated Home Purchase Plans are covered by the FCA's conduct rules and the Financial Ombudsman. Your home may be repossessed if you do not keep up payments, exactly as with a mortgage.
What we recommend
Read the contract before the rate. Every provider publishes its terms and its Shariah certificate, and the halal mortgage guide links to each one. Then run the numbers on the halal mortgage calculator, because once the religious question is settled the practical one is which band you are in.
If you want an hour to get the whole picture straight, deposit, structure, the questions to ask a provider and the questions to ask a scholar, book a Home Buying Plan call. We will not tell you what is halal. We will make sure you know what you are asking.
Ziyad Finance provides educational guidance only. We are not a scholar and do not issue rulings; we are not a mortgage adviser, do not arrange home finance and receive no fee from any provider named here. Contract descriptions are based on each provider's published terms and Shariah certificates as at 12 September 2026. Verify with your own scholar. Your home may be repossessed if you do not keep up payments on your Home Purchase Plan. Read our full disclaimer.
