Concessionary Purchase: Can You Buy With No Deposit?

If you’ve been offered a home at a reduced price by a family member or your landlord, you might be wondering “concessionary purchase: can you buy with no deposit?” The simple answer is often yes. One of the biggest advantages of a concessionary purchase is that the discount can replace the need for a traditional cash deposit, allowing you to buy a property sooner than you thought possible.

In this guide, we explain how no-deposit concessionary purchases work, how lenders treat the discount, what checks are required and what situations may still require a small cash contribution.

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What Is a Concessionary Purchase?

A concessionary purchase is when someone sells a property to you below its full market value.
The difference between the market value and the agreed sale price becomes gifted equity — and this is what can replace your cash deposit.

Example:

• Market value: £260,000
• Discounted price: £230,000
• Gifted equity: £30,000

This £30,000 is treated as though you paid it as a deposit, even though you didn’t put any cash down.

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Concessionary Purchase: Can You Buy With No Deposit?

Yes — many buyers complete concessionary purchases with £0 cash deposit, because the gifted equity becomes the deposit.

Most lenders accept:

• Family discounts (parent to child, siblings, grandparents)
• Landlord discounts (tenant buys the rented property at a reduced price)

In both cases, the lender applies the discount as your full deposit.

This makes it possible to secure a mortgage even if you haven’t saved a traditional lump sum.

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How Gifted Equity Replaces a Deposit

Gifted equity works exactly like a standard deposit from the lender’s perspective.

It helps because:

• It reduces the loan-to-value (LTV)
• It improves affordability
• It reduces the lender’s risk
• It shows financial support from the seller
• It gives you built-in equity from day one

This is why lenders are usually open to no-deposit concessionary purchases — you start off in a stronger position than someone paying full price.

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Lender Criteria for No-Deposit Concessionary Purchases

Many buyers ask the same question: concessionary purchase can you buy with no deposit, and the answer depends on lender criteria, valuation strength and the size of the discount offered.

To approve the mortgage without a cash deposit, lenders typically require:

• A full valuation confirming the market value
• A gifted equity letter confirming the discount is non-repayable
• Clear documentation showing the relationship between buyer and seller (if family)
• Tenancy evidence (if landlord sale)
• Proof that no money is being exchanged “off the books”
• Solicitors confirming the discount is genuine

These checks protect both the lender and the buyer.

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When You Can Buy With No Deposit

You can usually buy with zero deposit if:

• The discount is big enough to meet the lender’s deposit requirement
• The valuation supports a strong market value
• Your income passes affordability checks
• Your credit file is acceptable
• The gifted equity letter is submitted correctly

Many lenders accept as little as a 5% gifted equity deposit, meaning even modest discounts can be enough.

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When You Might Still Need a Small Cash Deposit

Although many buyers don’t need any cash deposit, there are situations where you may still need to contribute:

1. The Discount Is Small

A 2–3% discount may not meet minimum lender deposit levels.

2. You Have Recent Adverse Credit

Some lenders require buyers with credit issues to contribute some cash, even when gifted equity is present.

3. You Want a Lower Rate

A cash top-up can reduce the LTV and unlock cheaper rates.

4. The Valuation Is Lower Than Expected

If the surveyor values the property below assumptions, gifted equity may shrink.

But even in these situations, the required cash deposit is often much smaller than buying on the open market.

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How Valuations Work on No-Deposit Concessionary Purchases

Valuation is crucial because it confirms:

• The true market value
• The size of the discount
• How much gifted equity you are receiving
• Whether the deposit requirement is met

Lenders calculate LTV on the market value, not the discounted price.

Example:

• Market value: £300,000
• Discounted price: £270,000
• Mortgage required: £270,000

Your effective LTV is 90%, not 100%, even though you’re borrowing the full price.

This can make a big difference to lender acceptance.

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Family vs Landlord Discounts: Are Both Accepted?

Both types are usually accepted, but criteria differ slightly.

Family Concessionary Purchases

✔ Widely accepted
✔ Often allow bigger discounts
✔ Usually the easiest route for no-deposit mortgages

Landlord Concessionary Purchases

✔ Many lenders accept them
✔ Popular with long-term tenants
✔ Tenancy and rent history may be checked

Both can qualify for a no-deposit mortgage if the gifted equity is sufficient.

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Benefits of Buying With No Deposit

• You can buy sooner
• You avoid years of saving
• You gain instant equity
• Lower Stamp Duty due to discounted price
• You skip the stress of competing on the open market
• No moving costs if buying your rental property
• Often quicker than a standard purchase

For many buyers, concessionary purchases open doors that would otherwise remain closed.

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Potential Downsides to Consider

• Lender choice can be more limited
• More documents are required
• Valuation must support the discount
• Family or landlord expectations must be clear
• Not all discounts qualify as gifted equity

These aren’t deal-breakers but are worth being aware of.

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How to Strengthen a No-Deposit Application

To maximise your chances:

• Get an early valuation to confirm market value
• Keep bank statements stable
• Avoid new credit during the process
• Prepare income documents early
• Make sure the gifted equity letter is clearly written
• Use a solicitor experienced in concessionary purchases

Your preparation can significantly speed up the process.

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Final Thoughts

A concessionary purchase makes it genuinely possible to buy a home with no deposit at all, thanks to gifted equity from a family member or landlord. Understanding how valuations, lender rules and affordability work helps you make the most of this opportunity.

If you want help exploring whether you could buy with no deposit through a concessionary purchase, we’re here to guide you through every step.