A selected number of third party introducers will be invited to take part in the initial project. Once complete, HSBC plans to extend the scheme to the wider intermediary market. HSBC will pay commission based on a percentage of the drawdown for any leads generated.
The Amanah home finance scheme is suitable for clients who do not want to compromise their beliefs in order to own their own home. Under the home finance scheme, the bank buys the property and leases it back to the customer over an agreed term (usually 25 years). The customer makes monthly payments made up of rent and payments towards the purchase price (and a portion for buildings insurance). HSBC owns the property until the customer has made their final payment. In Islamic terms, the rent is not another name for interest; it is seen as a fair payment for use of the property rather than a charge for borrowing money.
HSBC became the first and only high street bank in the UK to launch an Islamic home finance product and current account last July. Since launching, the scheme has generated over 10,000 enquiries, with HSBC expanding it into over 84 branches in key Muslim areas such as Manchester, Bradford, Birmingham, Cardiff and London, with more areas planned.
Noaman Hasan, UK head of HSBC Amanah Finance, comments: "This development will enable us to reach many more potential customers, particularly those who prefer to deal with an adviser they already know. We estimate that Muslims currently account for some £9 billion of conventional mortgage
balances in the UK - this represents a healthy potential market for intermediaries who are able to tap into it."
