Concessionary purchase mortgages explained: a guide for brokers

As a broker, you may come across clients buying properties through less conventional routes, like discounted or concessionary sales. These purchases require specialist lending solutions, and that’s where the concessionary purchase mortgage comes in.

What is a concessionary purchase mortgage?

A concessionary purchase mortgage is designed for buyers purchasing a property at a discount to its market value. This discount can arise through various arrangements, such as family members wanting to help each other out, landlord selling to a long-standing, or buying inherited properties where the purchaser is acquiring other beneficiaries’ shares. Because the purchase price is below the typical market level, lenders need to carefully assess the transaction to ensure the discount is genuine and that the loan remains secure and affordable.

Who does this appeal to?

• First-time buyers looking for an accessible route onto the property ladder.
• Landlords wanting to sell their property to sitting tenants, enabling tenants to buy the home they already live in.
• Relatives selling within the family at a reduced price, often helping purchasers who may struggle to raise a full deposit.
• Buyers of inherited properties, where the purchaser is buying out other beneficiaries’ portions (family member to family member).

Choosing a specialist lender

Concessionary purchase mortgages aren’t always straightforward, they may need specialist expertise to navigate the legal, financial, and compliance complexities involved.

Aldermore’s in-depth experience and tailored approach make us a strong partner for brokers handling these cases. We understand the importance of verifying genuine discounts, assessing risk accurately, and ensuring compliance without adding unnecessary hurdles.

How Aldermore can help with concessionary purchase mortgages

Here’s an overview of Aldermore’s key criteria and features for concessionary purchases:

Minimum concession

• Employed applicants: A minimum 2% discount off the property's market value applies for Level 1.
• Self-employed applicants: A minimum 5% discount off the property's market value applies.

Loan-to-value

Loans of up to 98% LTV are available, subject to affordability assessment and internal scoring.

Where at least a 2% equity gift is provided, loans may be considered up to 100% of the purchase price.

Product availability

• Available on residential owner-occupied properties across Levels 1 to 4.
• For Level 5 products, the customer must provide a minimum 5% deposit.

Maximum discount limits

• Inter-family sales: Up to a 50% discount from the property's valuation can be considered. This includes sales between parents, grandparents, siblings, children, aunts/uncles and step-relatives.
• Landlord-to-tenant sales: Up to a 25% discount from the property's valuation can be considered.

Important: The maximum discount limits include any additional gifted deposit amounts.

What this means for brokers and clients

Concessionary purchase mortgages open up opportunities for clients who may otherwise struggle to access traditional lending, whether first-time buyers, sitting tenants, family purchasers, or those buying inherited property shares.

Working with Aldermore means you get:

• Clear, specialist criteria that reduce uncertainty.
• Support through the underwriting process to help cases proceed smoothly.
• A lender who values and understands the complexities involved in these deals.

Our aim is to empower brokers with the tools and expertise to help their clients secure the best possible outcome.

If you have clients considering a concessionary purchase, Aldermore’s specialist lending team is ready to support you. For full product details or help with specific cases, please contact your Aldermore BDM.