The area of home purchase finance is by far the best supplied with shari’a compliant products in the United Kingdom. It accounts for the bulk of activity in the retail Islamic market.
The Islamic Investment and Banking Unit of the Ahli United Bank was the first bank in the United Kingdom to introduce a form of shari’a compliant home purchase finance. This product was given the distinctive brand name of Manzil, an Arabic word meaning home or dwelling. For marketing purposes the Manzil Home Purchase Plan is promoted as a fairly self-contained product, with the Ahli name somewhat in the background.
Manzil was launched in 1997. At that time only a murabaha contract was offered. The basic principle of this is that the bank purchases a house on behalf of the customer and then resells it to the customer at a higher price. The customer pays the higher price in instalments in a similar way to the repayments on a conventional loan. The attraction of this form of finance to the bank is the simplicity of the contract in both conceptual and legal terms, and its close adherence to the underlying principle in Islamic law that the most acceptable type of contract is a straightforward