Islamic Finance Offers Growing Opportunities For UK Market As Understanding Increases

Afsor Ullah, is a Partner and Head of Islamic Finance at Druces LPP, the only City law firm with a Head of Islamic Finance. Afsor has spent the last decade of his career acting for financial institutions, property developers and private investors to acquire, dispose and finance residential and commercial properties. His clients include shariah compliant bridging lenders, commercial banks and investors in the UK and from the Middle East. He is well versed in all Islamic finance structures used in property transactions.

He says: “There is a growing awareness and understanding of Islamic finance that is creating new opportunities for the UK financial and legal sectors, as businesses and investors increasingly recognise the flexibility, ethical foundations, and international appeal of Sharia-compliant financial structures.

Whilst Islamic finance is sometimes perceived in the West as unfamiliar or complex, it is a highly sophisticated and internationally recognised form of finance that operates very effectively within the UK’s legal and regulatory framework. It is not a parallel financial system operating outside UK norms. Rather, it is a well-established method of structuring investments and transactions in a way that complies both with UK law and with Sharia principles observed by many Muslim investors and institutions worldwide.

The UK has spent more than two decades developing its position as a leading Western centre for Islamic finance. London’s globally respected legal framework, mature regulatory environment, and international connectivity have made it an attractive jurisdiction for Sharia-compliant banking, real estate, infrastructure and private financing transactions.

Islamic finance - now representing a multi-trillion-dollar global industry - is founded on principles including transparency, asset-backed financing, ethical investment and shared risk. It prohibits the payment or receipt of interest (riba), instead favouring structures linked to tangible economic activity and mutually agreed commercial outcomes.

Importantly, Islamic finance products in the UK operate fully within the country’s existing legal and regulatory framework. Products are designed to satisfy both UK financial regulations and the religious observances required by Sharia-conscious investors.

In practice, Islamic finance sits comfortably alongside conventional banking and investment products, providing alternative structures rather than replacing traditional finance. It is also increasingly attracting interest from non-Muslim investors and businesses seeking ethical, transparent and asset-backed approaches to funding and investment.

Industry experts believe there is significant scope for further growth in the UK market, particularly in areas such as infrastructure, regeneration, property development, sustainable finance and international investment partnerships.

The continued expansion of Islamic finance could help support major UK projects while strengthening links with investors and institutions across the Gulf, Southeast Asia and other international markets where Sharia-compliant finance plays a central role.

The UK has established itself as one of the leading Western jurisdictions for Islamic finance because it offers legal certainty, strong governance and a deep understanding of international commercial structures.

At its core, Islamic finance is built around ethical investment, transparency, shared risk and real economic activity. Those principles are increasingly attractive not only to Muslim investors, but to a much broader international market looking for stability, accountability and long-term value.

Despite lingering misconceptions, Islamic finance in the UK does not introduce religious governance into the financial system. Instead, it offers compliant financial structures that support inward investment, broaden funding options and contribute to the diversity and competitiveness of the UK market.

As international demand for ethical and asset-based financing continues to grow, the UK is well positioned to strengthen its role as a global hub for Islamic finance and Sharia-compliant investment.”

Afsor Ullah, Partner and Head of Islamic Finance, Druces LLP

For further information please contact: Sara Pearson 0781 8061328

www.druces.com

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