Around 4 million Muslims live in the UK, and Islamic finance principles prohibit interest (riba). Sharia-compliant products use alternative structures enabling homeownership.\n\nThe Principle — Money cannot generate money directly in Islamic finance. Transactions must involve real assets and genuine risk-sharing. Islamic home finance structures the transaction so the bank buys or co-owns the property and you pay rent or purchase in instalments.\n\nDiminishing Musharakah — The most common UK structure. The bank and you jointly purchase the property. You gradually buy the bank's share through regular payments combining a purchase portion (increasing ownership) and a rental payment for the share you do not yet own.\n\nMurabaha — The bank buys the property and immediately sells it to you at a higher price payable in instalments. The markup replaces interest. Total cost is agreed upfront and fixed.\n\nIjara — The bank buys and leases the property to you. You pay rent plus a contribution toward eventual purchase. Ownership transfers at the end of the term.\n\nUK Providers — Gatehouse Bank is the largest dedicated Islamic bank. Al Rayan Bank offers Home Purchase Plans. HSBC Amanah provides Sharia-compliant finance through its Islamic division. UBL UK and Ahli United Bank also offer products.\n\nPractical Considerations — Products are typically 0.1% to 0.5% more expensive than conventional equivalents due to smaller market and structuring costs. Stamp duty treatment is identical. The FCA regulates Islamic finance products with the same consumer protections as conventional mortgages. You can use Islamic finance with Shared Ownership and other government schemes.