The Buy to Let Purchase Plan (BTLPP) is a variable rental rate product available to landlords of any faith with a deposit of 35% at a rental rate of 5.49%. The paying of interest is not allowed under Sharia Law.

With most mortgage-alternative products from the Islamic Bank of Britain (IBB), the customer buys the property in partnership with the IBB. The customer then also pays rent on the IBB’s share of the property.

The customer’s monthly payment consists of an acquisition payment and rental payment. The former increases the customer’s share in the property and the latter is rent paid by the customer for the share that the Bank owns. At the end of the term, when all acquisition payments have been made and the finance has been settled, ownership of the property transfers fully to the customer.

However, with a rent-only BTLPP the customer’s payments only cover the rent paid to IBB and do not increase the customer’s share in the property. To acquire IBB’s share in the property the customer needs to make a lump sum payment at the end of the finance term.

Commenting on the launch of the new deal Imran Pasha, head of sales and service, Islamic Bank of Britain said:

“IBB launched its Sharia compliant Buy to Let Purchase Plan in November 2011 and we have seen a healthy demand for the product since then. The recent launch of the rent-only BTLPP is the natural next step. There is a growing demand from landlords for Sharia-compliant property finance and a rent-only product provides them with an affordable way to access it.”