Mortgage That Lets Renters Buy a Home with No Deposit


No Deposit Required

A little-known mortgage option, known as a concessionary purchase mortgage, is helping first-time buyers purchase a home without the need for a deposit. This type of mortgage allows tenants to buy the property they are already living in, with the landlord offering a discount equivalent to the typical deposit amount. Lenders such as Nationwide, Halifax, Barclays, and Leeds Building Society offer this mortgage option.

Benefits of a Concessionary Mortgage

The main advantage of a concessionary mortgage is that it eliminates the need for a deposit. The discounted price can be used as the deposit, or it can be put towards the deposit. This can be particularly attractive for tenants who struggle to save for a deposit due to high rental costs. Buying from a landlord also reduces stress and moving costs.

Drawbacks of a Concessionary Mortgage

Not all lenders offer concessionary mortgages, so there may be limited options available. Some lenders may also require the buyer to contribute a personal deposit in addition to the equity gift. Additionally, it's important to conduct a thorough survey of the property to identify any potential issues or costly defects.

Other First-Time Buyer Schemes

In addition to concessionary mortgages, there are other schemes available for first-time buyers with small or zero deposits. Some banks and building societies offer 100% loan-to-value mortgages, where no deposit is required. The Right to Buy and Right to Acquire schemes allow tenants to purchase their rental properties at a discounted price. Property developer Fairview has also introduced the Save to Buy scheme, which allows buyers to save for their deposit while living in their new home.

Overall, concessionary mortgages provide an alternative option for renters looking to take the first step onto the property ladder without the burden of a deposit.

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