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The purpose of this paper is to present an analysis of current practices of Islamic mortgages in the light of the principles of Islamic financial system, to document divergences – if any. A subsidiary goal is to develop an Islamic Mortgage Model (IMM) based on Musharakah principles.

The author documents theoretical underpinnings of risk-return sharing from the Shari’ah perspective. A comparative study of conventional and Islamic mortgages is completed; existing practice of Islamic mortgages analyzed in the light of Musharakah principles and divergences identified. IMM is developed after taking divergences and Musharakah principles into considerations. A housing case is used to highlight differences (in financial terms) under multiple methods and scenarios.

Study documents multiple divergences from Musharakah principles in the existing practice of Islamic mortgages including ignorance of market pricing in the negotiation of rentals and trading of equity units, and transfer of all ownership risks and rewards (vacancy, damage, destruction and market) to one partner (i.e. customer). Practice is divergent from principles in the area of economic substance. Modified IMM is developed by taking into account Musharakah principles; and differences highlighted by calculating financial figures – to determine financial rights and liabilities of the parties.

Divergence from the principles of risk-return sharing leads to failure in the achievement of Islamic finance objective of equitable distribution of wealth. Moreover, protection of capital for financier reduces the market abilities to achieve financial stability by matching credit expansion with the rise in the real economy. Shari’ah boards and regulators, as well as, management of Islamic banking industry are expected to incorporate proposed changes in-practice for the realization of Islamic finance objectives.

This study contributes to Islamic finance literature in the area of risk-return sharing. Based on important objectives of Islamic finance – equitable distribution of wealth and financial stability – divergences identified and a modified IMM in the light of Musharakah principles is presented. Descriptive rules are transformed into financial figures to document financial rights and liabilities of the concerned parties.

Most households in Sub-Saharan African cannot afford adequate housing. Most often, their pension benefits are also meagre, usually resulting from low contribution levels and mismanagement. Coupled with low life expectancies, most would not live to enjoy the benefits of pensions, thus validating the need to utilize their hitherto deferred pension benefits for immediate housing investment and consumption.

Quantitative research methodology via the present value technique was used in valuing pension benefits to demonstrate the potential of pension schemes as savings mobilization mechanisms for long-term pension-backed housing financing in Ghana.

Policy wise, the paper provides some evidence to support proposals for the development of pension-backed housing finance systems in Ghana with lessons for Sub-Saharan Africa. The authors demonstrate that the Tier 2 defined contribution mandatory occupational pension scheme could serve the purpose of a savings mobilization mechanism for long-term housing financing. The authors observe that by increasing the Tier 2 contribution rate to 30 per cent, the majority of the sample, mainly of the middle-income class, could accumulate between US$11,000 and US$17,000 over their working life. At the same rate, between US$5,783 and US$9,550 could have been raised as savings between 2010 (when implementation began) and 2014. This could form a substantial equity contribution in a mortgage investment and or borrowed on a housing microfinance basis.

The paper contributes to the ongoing debate on the need to develop alternate savings mechanisms and collateral assets using pension assets, other than property, for mortgage financing. The proposals made are aimed at influencing policy by way of advocating for the use of latent pension equity to improve the housing conditions of members while they are alive, and also to suggest pension-backed housing financing as an alternative investment option. A comprehensive study would be required to settle issues of scalability, pricing and model design.

Since the 2007–2008 financial crisis, the markets related to housing finance have been restoring their tools and instruments in order to avoid a new crisis. In this period, while attempting to eliminate structural problems in existing housing finance instruments, on the other hand new products were tried to figure out. In particular, products based on risk sharing have frequently come to the forefront, both in the academia and the industry. In this direction, one such innovative product is the participating mortgage, in which the borrower obtains below-market interest rates in return for a percentage of the property’s future appreciation and/or net operating income. Particularly used in conventional markets, participating mortgage can also be applied within the Islamic finance thanks to the model it is based on. This chapter attempts to introduce the method of participating mortgage with detailed background and intellectual investigation. Including the modeling of participating mortgage, this study also shows how this method can be designed under Islamic finance. Furthermore, implications and fields of application are explored with a discussion of challenges. In this chapter, considering the achievements of participating mortgage method, it is asserted that it can enable the product diversity of the Islamic banks, thereby increasing the share in the global banking sector.

This paper aims to evaluate the bane of home ownership in Nigeria through mortgage financing by examining the determinants of intention of using mortgage in financing home ownership.

The paper adopted a survey quantitative research design. A total of 235 valid questionnaires randomly distributed were retrieved from 300 potential homeowners who were the sample of the research. Partial least squares-structural equation modeling was used for data analysis and hypotheses testing.

The findings revealed that religious perception on mortgage was the most significant determinant of intention of using mortgage in financing home-ownership. Subjective norms and perceived behavioral control also have significant effect on intention of using mortgage financing. However, attitude and familiarity/knowledge of mortgage were found not to have a significant effect on intention of using mortgage financing. The determinants cumulatively determined 77.6 per cent (R2 = 0.776) of the variance in intention of using mortgage in financing home ownership.

The research contributed to knowledge and has practical implications to policy makers, mortgage institutions, investors and the society.

The paper uniquely explores the bane of home-ownership through mortgage financing by examining potential home-owners’ intention of using mortgage financing. To authors’ knowledge, this is the first paper to evaluate intention of using mortgage financing, at least in Nigeria.

This study aims to examine why Ghana has English legal origins (hypothesised as a legal framework that promotes financial development) but has not developed a well-functioning mortgage finance market.

The authors adopt the institutional autopsy approach developed by Milhaupt and Pistor (2008). This study is not a cross-country study but a historical examination of Ghana’s mortgage finance regulatory framework. The institutional autopsy framework considers the iterative process of change in a system and allows for context-specific system analysis.

The authors note that for a long period of about 68 years (1940-2008), some of the legal rules regulating mortgage finance were not typical of the hypothesised characteristics of the English common law tradition. These rules, including, interest rate controls, excessive entry barriers, loan default guarantee discriminations and complex foreclosure procedures, tended to inadequately protect creditors. In the context of the history of military rule and law-making, judicial discretion that could have promoted legal efficiency and strengthened contract enforcement was also limited. During this period, the legal system demonstrated a concentrated and coordinative character. New legislation in the form of the Home Mortgage Finance Act 2008 (Act 770) attempts to resolve some of these bottlenecks and improve creditor rights protection.

The study focuses solely on how the legal institution affects creditor protection and mortgage finance in Ghana.

Policy-wise, the study deepens the understanding of the channels through which the law affects the development of mortgage finance.

To the best of the authors’ knowledge, the methodology used (institutional autopsy) is novel in the context of analysing mortgage finance.

This paper aims to explore public perceptions on marketing‐related issues of Islamic mortgages, which can help to identify the contents of the best marketing strategies for financial institutions wishing to promote Islamic mortgages among the Muslim community in the UK. In doing so, the access issues of the Islamic mortgages and how to effectively raise awareness among the Muslim community is discussed. The paper also aims to discuss the integration of the Islamic mortgage and to investigate the importance of staff confidence and the acceptability of promoting the Islamic mortgage by a non‐Muslim sales person. Furthermore, the role of religion, the Muslim households' consumer preferences and the prospect of Islamic mortgage providers' cross‐selling Islamic mortgage products to the Muslim customers are also discussed.

The principal method used to gather primary data is a questionnaire survey conducted with Muslim households in East London. From a total of 350 questionnaires distributed, 270 were returned, of which 250 were fully completed, thereby yielding a response rate of about 77 per cent.

The findings indicate that wider social factors and lifestyle choices may be increasing the demand for Islamic mortgages. The paper also argues that there is scope in the UK to expand the market for Islamic products and services to non‐Muslims as well if effective and sound marketing strategies are implemented.

The sample size can be extended to have more reliable results. In addition, future research should consider other geographical locations in the UK to provide diversity in terms of participants.

The findings of the research can provide valuable information for the Islamic mortgage market in the UK but also render information for Islamic finance service providers in shaping their marketing strategy in relation to Islamic mortgages.

The paper utilises primary data from a particular case, which provides valuable findings in relation to participants' perceptions on Islamic mortgage and its marketing‐related issues. It also provides the elements of an effective marketing strategy for the marketing of Islamic mortgages in the UK. Therefore, in addition to being an academic paper appealing to academic inquiry, it has practical implications for the industry as well.

The purpose of this study is to investigate barriers to accessing mortgages in Nigeria’s urban housing markets with the main focus on Kaduna State. The objective was to establish the diverse factors that constitute barriers to urban households’ access to mortgages for homeownership from the perceptions of households, mortgage lenders and the Federal Mortgage Bank of Nigeria.

The study used cross-sectional survey with triangulation of results. To enable the triangulation, three new samples were developed from 450 surveys with households and 10 completed by lenders, both in Kaduna State and one survey undertaken by the Federal Mortgage Bank of Nigeria. Data were collected with questionnaires designed on five-point Likert model. Data analysis utilized descriptive statistics and one-sample t-test. Triangulation enabled cross-validation of the results.

The barriers include low incomes and savings which constrain households’ ability to pay mortgage instalments and deposits, respectively, high interest rates, poor access to land, inability of potential borrowers to provide certificates of occupancy on their land, inadequate loanable funds and inadequate number of mortgage lending institutions.

The study has the potential to provide a basis for mortgage market reforms. Mortgage market reforms should be encompassing because it requires action in some other sectors.

The social implication of the study is the possibility of motivating actions to deal with the diverse barriers to accessing mortgages which have constituted deterrents to households from realizing their homeownership aspirations and enjoying the benefits of homeownership and consequently contributing to inadequate housing and poor living conditions.

The study provides distinctive insight into Nigeria’s mortgage market by integrating the views of various stakeholders on a subject of social and economic significance. It contributes to the evidence-base around mortgage market reforms in Nigeria.

There are striking similarities between publicly-held government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac and investor-owned public utilities. Each firm enjoys large scale economies that give a significant competitive advantage over other companies, possesses a dominant market position that it may be able to exploit to earn profits above competitive levels, and has a strong incentive to enter new markets when the life cycle of its core markets constrain its ability to increase profits. The recent behavior of Fannie Mae and Freddie Mac indicates that the government must impose more stringent economic regulation on those GSEs in order to be sure that they achieve their public purposes.

This study aims to propose a new model of Islamic cooperative mortgage of housing finance (ICOM) to provide a lower monthly initial amount with a longer tenure for the low- and middle-income members. This model is developed to ease the burden on borrowers concerning the high initial down payment (ID).

The ICOM model is a no-interest mortgage and is developed based on the cooperative home mortgage model by Ebrahim (2009). The model is verified using numerical examples to ensure its feasibility to produce lower monthly initial amounts and compared to the cooperative home mortgage.

From the numerical example, the ICOM model shows a lower monthly initial amount with a longer tenure compared to the cooperative home mortgage. The monthly payment is also lower than the cooperative home mortgage.

The authors compare their model with Ebrahim’s (2009) cooperative home mortgage because of a constraint of limited previous studies on housing finance. Therefore, this model is developed by considering the unaffordability of the initial down payment among low-income borrowers. As this model introduces a lower monthly initial amount, the authors expect it can reduce the unaffordability problem of high initial down payment.

The authors also expect that a lower monthly initial amount with a longer tenure can ease the burden among the low-income borrowers by reducing their consumption on housing.

This paper provides a non-interest Islamic cooperative mortgage and lower monthly initial amount with a longer tenure for the low- and middle-income borrowers.

This study purposely re‐examine the mortgage–finance nexus in Africa.

This study adopted a panel data set spanning over the period 1995–2017 by using system generalized method of moments (GMM) dynamic pooled estimator developed by Arellano and Bond (1991) and Arellano and Bover (1995) involving 51 African countries.

The findings discovered that financial development (bank asset) affects mortgage development positively and this effect is highly significant while broad money supply as a measure of financial development impedes mortgage development in Africa. Furthermore, with the introduction of the quadratic term, broad money supply established a U-shaped relationship with mortgage financing indicating that more money in circulation facilitates mortgage development in Africa. However, the shape of the other variables depends largely on the nature of proxy used.

This study is unique in many aspects. First, examining the extant literature on the financial development and mortgage financing nexus, to the best of the authors’ knowledge, no study is cited at the African level with this relationship. Secondly is the empirical model, as it used the system GMM dynamic pooled estimator developed by Arellano and Bond (1991) and Arellano and Bover (1995) to establish whether there is any effect of finance–mortgage nexus.