Can Islamic mortgages help the current UK housing market?

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ACKNOWLEDGEMENT

No words can express my appreciation and gratitude to my research advisor _______ through the course of this research, Professor _____has taught me numerous values that extend well beyond the realm of _________ (Your Subject Name). His emphasis on dedication to work and his valuable and practical insights of life are some of the major highlights of my education at The University _________.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for the academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

ABSTRACT

The study of Islamic finance will likely conjure up imagery of bustling banking centers in Damascus, Baghdad or Cairo circa the apex of the Islamic Empire. However, the salience of Shari'ah-based banking institutions and practices has become increasingly relevant, both within and outside the bounds of the Muslim world. Today, "Islamic finance" and its range of financial products are part of the business dealings in New York City, Toronto, and London. Muslims living in the West have begun using Islamic finance in connection with purchases of real and personal property. The aim of this study was to discover whether the Islamic mortgage help the UK housing sector. The UK housing sector is in a terrible condition after the financial and global crisis, which had hit the whole UK. The recent global financial and economic crisis had made a terrible impact on the whole world, including United Kingdom. The housing sector of United Kingdom was also affected in a very adverse manner from the recent global and financial crisis, which has left very severe impact on the whole UK Housing sector. In this situation, the principles of Islamic mortgage could help the UK housing sector in once again developing itself. The main framework that has been presented through the Islamic banking and finance is the prohibition of interest in their business operations. Similarly, the absence of speculation in the trade of securities has also caused the Islamic banking system to remain unaffected by the financial crises and the economic crises. The securities and bonds that were the main reason of the global crises made it occurred.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER ONE: INTRODUCTION1

1.1 Background of the study1

1.2 Introduction1

1.3 Problem statement2

1.4 Aims and objectives of the study3

1.5 Research questions3

1.6 Rationale of the study4

CHAPTER 2: LITERATURE REVIEW5

2.1 Islamic finance5

2.2 The Islamic commitment to financial ethics & community empowerment6

2.3 Islamic Shari'a Compliant Home Mortgage Replacement Products (SCHMRP): A comparison of three countries7

2.4 Importance of SCHMRP8

2.5 Primary products of Shariah Compliant Market9

2.5.1 Murabaha9

2.5.2 Ijara10

CHAPTER 3: METHODOLOGY12

3.1 Outline of quantitative and qualitative approaches to conducting research12

3.2 Research approach used in this study12

3.3 Justification of using mixed method to research13

3.4 Ethical Considerations14

CHAPTER 4 DISCUSSION AND ANALYSIS15

4.1 Impact of Recession on Households in the United Kingdom15

4.2 A comparison of conventional and Islamic mortgage16

4.3 Demand for Islamic Finance Products in ...