British Muslims face steep barriers in ethical home finance despite high demand

A new report highlights the financial struggles faced by British Muslims when seeking home finance. Many find their options limited due to religious beliefs, with most mainstream products failing to meet ethical or faith-based requirements. The findings also reveal widespread delays and dissatisfaction with existing Islamic home finance services.

Nearly all British Muslims—94.2%—consider it essential that their financial products align with their ethical or religious values. Yet, eight in ten report restricted choices when buying a home because of their faith. Unlike conventional mortgages, Islamic home finance avoids interest and excludes investments in sectors like arms, gambling, alcohol, and tobacco.

Despite its ethical appeal, only 12.8% of British Muslims currently use Islamic home finance, while 11.5% have done so in the past. A significant 75.7% have never used it at all. Those who have often face long waits, with 62% reporting decision times of up to two weeks—just 5% received same-day approval.

The three biggest issues cited are slow processing, excessive paperwork, and poor customer service. Meanwhile, half of British Muslims using conventional mortgages feel uneasy due to their faith. Many prioritise homeownership to provide family stability and build generational wealth, but barriers remain.

Awareness of Islamic finance is also low among non-Muslims. Over six in ten have never heard of it, though 63% support its ethical principles once explained. The report calls on providers, brokers, and policymakers to streamline processes and improve the overall experience.

The findings underscore a gap between demand and accessibility for ethical home finance. British Muslims continue to face delays and limited options, while non-Muslims show interest in the ethical model once informed. The report urges industry reforms to make Islamic finance faster, simpler, and more widely available.