How do we purchase a house without a mortgage?

Yes, I guess their key challenge now is getting enough investment so they can scale and truly become a viable mass-market solution

True haha, people might also feel weary to save such big sums in an unregulated committee system, whereas with StepLadder, the platform takes full responsibility if someone drops out so no user experiences financial loss

True, not enough funding so a lot of these platform are very niche and have a long waiting list.

How do they ensure people remain within the scheme once they have received there target?

On primary finance it can be up to 5 years.

BarakAllahu feek.

It’s the musharaka structure so a little different to Ijara.
Ijara is where the lender buys the property and leases it to you, transferring ownership to you once the loan term ends. Musharaka is where you and the sharia-compliant lender buy the property together and you gradually buy them out of their share. The more shares you own the less you have to pay back.

I’m assuming they are binded by a contract, Apparently if you can’t afford to make a payment for a month you can drop out but will have to wait till the end to receive it back.

For primary finance the wait time is around 5 years long currently

Assalamualaikum everyone. Great discussion especially from @Khalil and @Ruqayyah

Personally, I have certified via the Islamic Council in London three home-financing programs, from them, Primary Finance and Wayhome. The Third is under review and audit currently for renewal.

Diminishing Musharakah is the popular choice for financers and creates the least liability footprint if offered without a condition to purchase the shares of the financer, from the financer, in a set amount of time. The presence of this condition has split contemporary scholars in terms of Shariah Compliancy with the majority of contemporary Islamic scholars viewing the structure as being akin to a Mortgage.

This topic is beyond the scope of this reply, and we can pick up in future more dedicated discussions.

That said, I do believe that owning a home is a necessity and it brings about the stability required to pursue our visions in a more focused way. Constant increments in rental agreements and eviction notices are counter-productive, and whilst there is no shame in renting a property, I do not discourage others from their ambitions towards home ownership.

It is important though to never forget, when maturing our ideas in this, space the following:

  1. The importance of living within our means, especially when borrowing.
  2. That the Shariah does not encourage going into debt, but does permit responsible borrowing, on condition that the borrower has a robust plan to pay all their creditors back upon a timescale and plan that is suitable to all parties.

And Allah knows best.

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