Lloyds TSB: Steps being taken to boost Islamic mortgage market

21 September 2007
The Islamic mortgage market has boomed in the wake of the abolition of double stamp duty, according to an expert.

Sharia law previously demanded that a property should be bought by the bank and then the customer which meant stamp duty had to be paid twice.

This was abolished by the government in 2003 and Islamic mortgages have become more popular as a result, according to a spokesperson from Lloyds TSB, who added that Datamonitor research indicated the market could top £1 billion in value by 2009.

Under Sharia law it is forbidden to make money from money, for example by charging interest.

"The government [decided that] Islamic mortgages are a growing area," the spokesperson said.

"But an extra £2,000, £3,000 is a big outlay for anyone, making it expensive for the banks to provide and expensive for customers to afford.

A report by research firm JWT Intelligence, Marketing to Muslims, put the spending power of UK Muslims above £20.5 billion.

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