01 / 03 · The House · Structures
Ijara, musharakah, murabaha — pick the one you actually signed.
British retail mostly sells diminishing musharakah. Ijara is a lease with a promise. Murabaha is a cost-plus sale. Calling all of them ‘Islamic mortgages’ is how the argument stays stupid.
The Mizan desk · 7 September 2026 · 10 min
A diminishing musharakah makes you a co-owner from day one. An ijara makes you a tenant until the last payment. A murabaha makes you a buyer of a house the financier already bought, at a disclosed markup, payable later. Those three sentences are the whole product set. Everything else is branding.
Why UK retail chose musharakah
English buyers want to be on the title. Help to Buy, most conveyancers, and most people’s sense of ‘our house’ assume ownership. Diminishing musharakah maps onto that instinct: you and the bank are on the structure; you buy them out. Al Rayan’s Home Purchase Plan and Gatehouse’s HPP are in this family even when the customer-facing PDF says ‘Islamic mortgage’.
Ijara is cleaner as fiqh for some boards: the bank owns, you lease, a separate undertaking transfers at the end. It is also further from how Britain thinks about a house. Repairs, insurance, and council tax have to follow lease logic, not borrower logic. When they don’t, the ijara is a loan again.
Murabaha is a poor 25-year house
A murabaha sale of a home at a fixed markup can work for a short hold — a bridge, a development exit, a cash-out with a defined term. Stretching it over 25 years with rate resets means you are either locking a 1990s price of money or quietly rewriting the markup. That rewrite is why UK retail almost never uses pure murabaha for the family home.
When a property trainer on X says ‘we buy it for £95k and sell it to you for £100k’, that is murabaha if they take title. Ask for the TR1. If there is no TR1, there is no sale.