Are there any Halal and Shariah compliant mortgages in the United Kingdom?
The answer
It is imperative one understands how Islamic banks work and how their products are developed. Thereafter, it will be clear that it is not appropriate for someone like myself who is not on the Shariah board of an Islamic bank in the UK to answer the question posed. Islamic banks like any other bank have procedures and protocols to follow. They must work within a framework and produce Shariah compliant products. Product development for Islamic banks has many phases and stages. Professor Habib Ahmed in his ‘Product Development in Islamic Banks’ mentions eighteen stages in the product development cycle involving idea screening, Shariah approval, product design, business case, marketing, reviews and Shariah audits. A product has to be signed-off at each phase before being launched in the market.
In short: the answer defers to the Shariah boards of UK Islamic banks.
Explanation
Furthermore, a Shariah compliant model is subject to regulation at various levels:
1) Product level
A product must comply with all Shariah regulations to be certified as Shariah compliant.
2) Organisational level
A product must comply with the financial regulators such as the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) in the UK.
3) Institutional level
A product must comply with the legal framework of the jurisdiction in which it is launched.
A product must comply and appease all the above dimensions before coming into existence. The challenge, skills and acumen invested in such product development can only be truly appreciated by those involved in the process.
To develop such products at an industry level, one needs to have knowledge, proficiency and literacy in some of the following:
1) Fiqh al-Mua’malāt (Transactional laws of Shariah)
2) Usul al-Fiqh
3) Regulation and governance
4) Economics
5) Experience in the financial industry
6) Legal awareness
Thus, scholars on the Shariah boards of Islamic financial institutions are relatively qualified and experienced in Islamic Finance. Furthermore, many of the contemporary issues in the financial industry require some form of ijtihād and interpretation. Hence, this can change from scholar to scholar depending on their expertise. Therefore, it may be better to refer to the actual scholars on the Shariah boards to understand their thinking, reasoning and explanation of the products.
Nevertheless, there are reputable Ulama and scholars on the shariah boards of many of the financial institutions. They have tried their best to produce a shariah compliant solution to facilitate for the Muslims in the UK. Some particular issues may not be understood by all or may be open for debate, whilst other issues may require development, however, as it is an issue of ijtihad and reasoning, you may follow the approval and certification of such reputable Shariah boards. Hence, going back to the original question, the scholars who are most worthy and most appropriate to answer the question posed are the scholars on the Shariah boards.
And Allah knows best.
Mufti Faraz Adam
Based on the Hanafi school and on the question as it was asked. Another mufti may reach a different conclusion. Read the disclaimer.