Uptake on Sharia mortgages and products limited according to new research directed by University of Kent
New research from the Social Contexts and Responses to Risk Programme (SCARR), directed by the University of Kent, has revealed that there has been a limited uptake on Sharia compliant mortgages and financial products in the UK.
The study, which was funded by the Economic and Social Research Council through a grant to the University of Kent, has also revealed that Muslims generally opt for conventional mortgage products, choosing to work to pay off their mortgage more quickly than the standard term in order to avoid the payment of too much interest (in Sharia law, the payment or receipt of interest on loans is forbidden).
The reasons for this include difficulties in accessing Sharia-compliant products, problems in negotiating with vendor’s solicitors, higher initial costs and issues to do with building up equity in the course of a mortgage.
However, the research has found strong evidence for a greater role for Sharia-compliant financial products, such as mortgages, and the option for using Sharia law to resolve financial disputes.
Peter Taylor-Gooby, Professor of Social Policy at the School of Social Policy, Sociology and Social Research, University of Kent and Director of SCARR, said: ‘There has been much debate about how the institutions of Sharia are compatible with UK traditions. This work shows that many Muslims are flexible between Sharia and interest-based mortgages and that there is a ready market for Sharia products alongside the established products.’
The research, which is part of a broader project investigating how religious values influence attitudes to financial risk, was carried out by Deborah Quilgars and Anwen Jones at the Centre for Housing Policy, University of York, and David Abbott at the Norah Fry Research Centre, University of Bristol.
The study is part of an Economic and Social Research Council Priority Network on Risk in Social Contexts directed by Professor Peter Taylor-Gooby at the University of Kent.
Further details of the research are available at: www.kent.ac.uk/scarr/publications/QuilgarsJonesAbbottWP22.pdf