Scotland: Ministers considering Sharia financing for social housing

Scotland: Ministers considering Sharia financing for social housing

Ministers are considering asking Muslim investors to help fund social housing in Scotland to ease pressure on the government's budget.

The Islamic Finance Council, which promotes the use of finance from Muslim sources in Scotland, is to meet Alex Neil, the housing minister, to discuss how Muslim wealth could be used to develop shared-ownership homes, in accordance with the principles of sharia — Islamic law.

The partnership could potentially save the Scottish government millions of pounds at a time when its budget is under unprecedented pressure because of the recession, and lead to a rise in the availability of affordable homes.

Shelter Scotland, the housing charity, claimed earlier this month that the number of council and housing-association homes for rent in Scotland has fallen to the lowest level for 50 years. There are about 599,000 socially rented properties across the country — 18% fewer than in 1998 and the lowest figure since 1959.

Under the Scottish government proposals, Muslim financiers would fund new properties with backing from the government. Under sharia, Muslims are forbidden from charging usury — or interest rates — in their financial dealings, so householders with a stake in properties would pay a rent set at a level similar to mortgage rates.

Unlike those with conventional British mortgages, householders would be largely insulated from negative equity.


Source: Times Online (English)

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