Frequently asked questions
Welcome to the Offa FAQs. Here, we've got simple answers to help you understand everything you need to know as you embark on your journey.
Welcome to the Offa FAQs. Here, we've got simple answers to help you understand everything you need to know as you embark on your journey.
FTV is the Finance to Value ratio and is calculated based on the amount of capital we have invested against the market valuation of the underlying property.
FTC is the Finance to Cost ratio and is calculated based on the amount of capital we have invested against the total cost of purchasing the underlying property.
Both FTV and FTC are ratios which measure the amount of finance made available in each transaction.
You can view the maximum FTV and FTC amounts we offer for our various products on the Products Page. Where there is a shortfall in the amount of finance offered, this will need to be sourced by the customer themselves.
After performing an initial case assessment, we may decide to proceed by providing an Indicative Terms Agreement. You will need to return this together with other forms, which you can access on our website.
Subject to you passing our initial due diligence checks, the agreement will require you to fund the costs relating to the application process. This includes the cost of obtaining a property valuation and instructing solicitors.
Once we have performed all our checks and ensured everything is in order, the agreed finance is made immediately available.
Currently you can expect to receive financing within 2-3 weeks of applying.
We aim to release financing at the earliest opportunity. On some occasions, this may be before all solicitor documents are received, as this could take a further 3-5 weeks.
We are exploring initiatives to streamline and expedite this process further, which will reduce the application to financing period to 1-2 weeks.
The method we use removes any uncertainty in the transaction. The fixed profit element is agreed and capped from the outset, thus protecting the customer.
The Islamic Financing structure we currently use is termed “Commodity Murahaba”, which is based on a deferred sale and purchase of a commodity (usually a metal).
The difference between the sale and purchase price represents the cost of our finance to the customer. Neither the customer, nor Offa as the seller, actually take any risk of price fluctuation in the underlying commodity.
To start, Offa buys a commodity at the spot price in the market today and transfers the commodity contract to the customer at an agreed mark up.
The customer immediately sells the commodity contract for cash at the same spot price today. The cash proceeds represent the finance from Offa to the customer. Offa manages this entire process.
From the outset the customer agrees to repay the cash proceeds from the sale of the commodity with a fixed profit margin to the seller (representing the seller’s cost of finance) over an agreed period (the term of the finance agreement).
The Islamic finance structure we use is termed “Commodity Murabaha”, which is based on a deferred sale and purchase of a Sharia-compliant commodity (usually a Metal).
The difference between the sale and purchase price represents the cost of our finance to the borrower.
It works like this: Offa buys a Sharia-compliant commodity from the commodities market via a broker for the amount of financing required. The customer purchases that commodity from Offa at a fixed mark-up representing Offa’s profit – to be paid at the end of the agreed financing term.
The customer, who now owns the commodity, then sells that commodity via a different broker to the market (at the same price that Offa bought it for) and receives the proceeds (i.e. the finance amount).
The whole process is managed by Offa. No market risk is taken as the commodity pricing when buying and selling to the market happens in immediate succession and at pricing agreed with the brokers.
Although we operate a fixed profit element, we also state the equivalent percentage rates that these would translate to had the financing been provided as a standard loan, which expired within the agreed term of repayment. This is to allow our clients the ability to compare with ease our ethical products with financing provided by conventional lenders.
By outsourcing representation of ourselves and the client to independent, qualified third parties ensures that any disputes are handled in an open, fair and transparent manner. This also minimises conflicts of interest.
This is dependent upon several factors, including your individual circumstances, the valuation of the property and the finance product you want. We are always happy to talk you through the different options.
Once we have performed an initial assessment, we will send you indicative terms, which are subject to the valuation of the property. By agreeing to these terms, you undertake to pay the valuation fees.
After receipt of payment, we will instruct a qualified surveyor to prepare a valuation report. This independent valuation will allow us to decide whether the property allows for an adequate level of security relative to the financing amount (i.e. meets necessary FTV % criteria).
Yes – a condition of any finance provided is that suitable building insurance is in place on completion.
We have a Sharia Supervisory Board (SSB), which comprise of qualified ethical and Islamic Finance experts and scholars. The SSB remains independent from the business, but are active in overseeing and monitoring our operations. We are also regularly audited by SSB appointed auditors. The auditors regularly engage in gathering evidence, performing in-depth analysis, and reporting their findings to the SSB. They have complete and full access to all our systems, employees, and any transaction-related documentation.
In some instances, the requirements of Sharia exceed those set by industry bodies. This is visible in areas such as ESG (Environment, Social and Governance), where we cannot obtain Sharia accreditation unless we fulfil a variety of ethical criteria, while for many conventional lenders these remain voluntary acts.
Islamic finance is the system for managing money while adhering to the moral principles of Islam. This comprehensive system covers everything from savings, to investments, and borrowing to buy property.
Islam’s moral principles, which guide Muslims to live in accordance with their faith, is sometimes known as the ‘Sharia’. It is therefore common to describe Islamic financial services as ‘Islamic finance’ or ‘Sharia-compliant’.
No, Islamic banking & finance is popular across both Muslim and non-Muslim communities, and they are available in both Muslim-majority and Muslim-minority countries. In fact, many British banks have developed financial products that are Sharia-compliant.Offa are, however, the first short-term bridge finance provider in the real estate sector whose products are both ethical and fully compliant with Islamic principles.
The term ‘ethical finance’ is used to describe finance which incorporates ethical considerations and criteria. This means taking into account sustainable development goals (SDG), as well as environmental, social and governance (ESG) factors that affect a borrower, their assets, and the wider community. Essentially ethical finance should benefit, not harm, society.
Unlike traditional corporate structures, where there can often be a disconnect between shareholder profit maximisation and corporate social responsibility, ethical financing puts the emphasis on society at large as a key stakeholder.
Ethical considerations will drive investment criteria, so finance will not be extended to activities that are deemed harmful, such as gambling, alcohol, tobacco, and weapons.
For Islamic finance providers like Offa, our ethics are primarily shaped by Sharia principles, which not only consider the environment and social issues, but also adds a sense of fairness to transactions. Sharia prohibits the charging or receiving of interest, and the profiting from another’s misfortune, such as when a customer is loss-making.
That means we will not take a draconian approach to late payments and will instead try to make a genuine effort to understand the customer’s circumstances before taking action. In the case where we do charge default penalties, this will go to charity and not be used for our own profit.
Another important difference is that ethical finance customers always know exactly how much to pay, and this does not deviate because of external market conditions. Everything is agreed in an open and transparent manner from the outset.
Ethical finance firms like Offa also donate a share of our profits to good causes, in our case charities such as WaterAid, Cancer Research, Islamic Relief and Donate to Educate.
If you need to complain, you can call, email, or write to us.
All we need to know is:
After you’ve made a complaint, we’ll get in touch with you within 24 hours. We’ll let you know that we’re on it and give you an idea of when you can expect a response. Plus, we’ll provide you with a unique reference number so we can easily locate your record.
We aim to resolve most complaints right away, but sometimes it might take a bit longer. Here’s what you can expect:
We will aim to resolve all complaints within 8 weeks.
Offa takes your privacy seriously and protects your personal information. During the application process, we’ll need to ask for your personal and financial details. This is to:
You can find full details about the information we need and how we use it in our Privacy Policy.
We do accept help from family members and friends for the deposit on the property you’re buying.
However, we’ll need them to sign a gifted deposit letter. This letter confirms that the deposit is a gift and doesn’t need to be paid back, and that the giver doesn’t have any financial interest in the property.
No. We won’t accept unsecured loan money as a valid deposit.
We do accept these types of deposit funds:
Our conveyancers will need to confirm proof of your deposit before the purchase is finalised.
The minimum amount of deposit depends on the type of finance you need. Here’s a breakdown:
You can use the buy-to-let calculator to see the rates and products available, and you can start an application whenever you’re ready.
We’ll need the following from you:
For the initial Decision in Principle application, you don’t need to provide any documents. However, when you’re ready to proceed with a full application, we may need to see documents to verify your earnings.
A BDM/Advisor from Offa or your Broker will discuss this with you to ensure all requirements are met.
For the initial Decision in Principle application, you don’t need to provide any documents. However, once you’re ready to proceed with advice and a formal application, we may need to verify your identity with certain documents.
Here are the documents we accept as proof of identity:
For the initial Decision in Principle application, you don’t need to provide any documents. However, once you’re ready to proceed with advice and a formal application, we may need to verify your address using specific documents.
Here are the documents we accept as proof of address:
Yes! You can refinance your current buy-to-let plan. Depending on your finance to-value, you can also access more equity from your property, up to 80% of its value, as long as you meet our eligibility requirements.
Yes! You can have as many active accounts as you want, as long as the total amount doesn’t exceed £2.5 million.
You need to be at least 18 to get a buy-to-let offer from us. No maximum age, provided the finance proposition is self-sufficient and retirement income meets requirements.
It shouldn’t be an issue, but we might need extra proof of income depending on your job change:
Yes, you can! Here’s how we consider your Limited Company Buy-to-Let application based on your shareholding:
Also, make sure all applicants have the proper authoriszation from their board to proceed with the transaction.
And have with the following SIC codes: 68100, 68209, 68320
We’ll look at the size and how long ago you got the CCJ to decide if we can offer you finance.
For all applicants on the finance:
Yes! We provide buy-to-let finance for new build properties to our customers.
We also offer tools like the buy-to-let calculator and rental income calculator to help you with your investment decisions.
Yes, you can apply. We may need to see when you’re planning to go back to work. Just reach out to us and we’ll guide you through the process.
To be eligible for finance, you need to have indefinite leave to enter or remain in the UK, or a visa that falls under certain categories such as the EU Settlement Scheme, Family Visa, Skilled Worker Visa, etc. Your visa must have at least 12 months left before expiry when you provide proof for your application.
If you’re British and Irish dual citizens, this rule doesn’t apply to you.
Regarding residency, whether you’re applying as an individual or a director of a company, you must have been living in the UK continuously for at least 2 years before applying for buy-to-let financing.
We accept the following:
Even if your property is empty, you still need to keep making your finance payments. Try to minimise the time it’s vacant. Also, make sure utilities and council tax are paid during these periods, and let your insurance provider know when the property is unoccupied.
The minimum property value for our Buy to Let Home Purchase Plan (BTL HPP) finance is £80,000.
For ex-local authority flats and maisonettes, it’s £100,000.
Additionally, the minimum finance amount we offer is £60,000.
No. You’ll need to provide the full address of the property you want to buy. This helps us run checks and value the property so we can give you a finance offer.
If you haven’t found a property yet but want to know how much we can offer, you can get a Decision in Principle (DIP). Then, once you find a property, you can continue with a full application.
To secure the finance product you want, you’ll need to finish your application. Your chosen finance product is only secured after you’ve submitted your application.
Our offers typically last for 90 days. If you need more time, we might be able to extend it, but we can’t guarantee this. If you have questions or need an extension, reach out to your Offa BDM/advisor or your Broker.
After the Initial Fixed Period, your monthly rent payments will be reviewed and fixed every quarter based on our current Standard Variable Rate.
We’ll let you know 30 days before and offer options to switch products if available.
SVR stands for ‘standard variable rate’
Our goal is to make your experience as smooth as possible, but if something goes wrong, please let us know and we’ll fix it.
For more details on how we handle complaints, click here.
Your Decision in Principle (DIP) is valid for 90 days.
If your income, expenses, or deposit amount changes, or if your DIP expires, please contact us for an updated document.
We need to ensure that we have the most up-to-date information about your personal details and financial situation.
We understand that circumstances can change during the application process. If this happens, please contact your BDM/Advisor or Broker as soon as possible to discuss the changes.
Of course, you can apply together with up to 2 people on an individual application.
If you’re applying through a Limited company (SPV), up to 4 people can be involved in the application.
When purchasing or refinancing a property, certain legal work needs to be done.
We don’t handle this legal work ourselves, so we have a panel of solicitors who do it for us. You will need to choose a solicitor from our panel to represent you.
For a Offa solicitor quote, click here.
What is Independent Legal Advice?
Independent Legal Advice (ILA) is advice given by a solicitor who isn’t involved in setting up your finances.
Why do I need it?
ILA ensures you fully understand the risks and obligations of the loan before signing anything. The ILA solicitor will explain everything in simple terms. They will also sign a certificate confirming they gave you the advice and that you signed the document in their presence without any pressure from others.
You usually need to pay a fee for this advice, which covers the solicitor’s time and preparation. This isn’t just a formality; it’s a serious legal requirement to make sure you understand your future risks.
If you want to change the bank account for your payments, you’ll need to fill out a new direct debit form.
Just remember, the bank account must be in your name and able to accept direct debits.
Yes, you can change your payment date to any date between the 1st and 28th of the month. However, a payment needs to be collected every month, so it has to be within the same month.
You can make an extra payment of up to 10% of the original finance amount within the first 12 months without paying any extra fees. We’ll let you know about any allowances for future years in your annual statements.