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If I receive a payment from the government under the 'key worker scheme' can I use this as a deposit and get an Islamic Mortgage?

Under the 'Key Worker Scheme', key workers (like teachers for example) are given money from Government to act as a deposit for their home, to help them purchase a property normally from a housing association. In such a case, any percentage paid as a deposit is paid back to the Housing Corporation (or Housing Association) ONLY in the event of the keyworker selling this property. If the property is not sold, that money doesn't get paid back. The only way the Housing Association can keep a tab on this by having a 'second charge' on the property.

Unfortunately this is not possible under shariah-compliant home purchase plans. Because the bank has to be named on the title deeds, in effect it also owns the property; they cannot allow anyone to take a second charge on the proeprty. This issue has been raised many times before and the banks are working closely with the Housing Corporation and the Office of Deputy Prime Minister to try and reslove this. Although I cannot see anything happening in the near future, insha'Allah it will happen at some point like many other issues like double stamp duty have been resolved over time.


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The entire product range offered on this website is Shariah compliant. However, from time to time we will promote relevant none Halal products where no Islamic / Halal alternatives exist. Your home is at risk if you do not keep up monthly payments due under an Islamic / Halal mortgage agreement (your lease and / or diminishing ownership agreement).