Question:
Assalamu ‘alaikum.
1. Are we allowed to buy a leasehold house in the UK?
For example, I will pay £50000 for the house and it has a lease of 125 years. However, I don’t own the land the house is on only the lease so once the lease runs out I will have to pay more to renew. If I don’t pay I can’t live there is this allowed?
2. Is buying a shared ownership house allowed the people that own the other shares will most likely have bought their shares via a mortgage. All I will do is buy a share and then get my rent money and in the future maybe sell the share. Is this allowed?
Answer:
Wa ‘alaykum assalam wa rahmatullah wa barakatuh.
I pray you are well.
Is it Permissible to Buy a Leasehold House?
Yes, this transaction is permissible. Although, it’s actually a long-term rental seeing as you do not actually own the property.
Is Buying a Shared Ownership House Permissible?
Yes, this would be permissible too, as long as you yourself do not get into a usurious transaction. If the share itself, or the other shares of the house had been purchased with a usurious transaction it does not affect the validity of your transaction. This is something the original owners have to deal with themselves.
The rental income from the property will also be permissible. (Maydani, al Lubab)
It’s best to avoid all forms of interest yourself, and if the other partners do engage with it, if you can give them a reminder and encouragement to repent in an effective manner do so. Tell them “Indeed Allah loves those who keep repenting…“ (Qur’an, 2:222)
May Allah grant you the best of both worlds.
[Shaykh] Abdul-Rahim
Checked and Approved by Shaykh Faraz Rabbani