Facilitating Affordable Housing in the UK Market Through Socially-Oriented Islamic Financial Institutions

Abstract

In the context of the growing global shortage of affordable housing, policy discourse in the last decade has centred on ways to get the private sector involved through a variety of public-private partnerships. This paper focusses on two such contemporary applications of community centred alternatives in Community Land Trusts (CLTs) and Shared Ownership Co-operatives (SOCs) and explores ways in which mainstream Islamic Finance can engage and support them. By focusing on the “private funding gap” that exists between mainstream finance and these community centered programs, the paper posits that Islamic Finance Institutions (IFIs) are well placed to provision financial support to such initiatives through the effective use of cash based endowments or awqaf. Such a re-structuring process within Islamic Finance proposes not only to allow IFIs effectively to assist in providing affordable housing but also promises to enable them to fulfil their originally stated socio-economic ideals better.