Concessionary Purchase: Can You Buy With No Deposit?

A concessionary purchase can offer a rare opportunity to buy a property at a discount, often allowing a buyer to secure a home with little or even no deposit. These arrangements have become increasingly popular among families, landlords selling to tenants, and employers providing discounted schemes. Understanding how concessionary purchase no deposit transactions work can help you evaluate your options and understand what lenders look for.

This guide explains what concessionary purchases are, how they work, and when lenders may accept the discount in place of a traditional cash deposit. This is general information only and not regulated mortgage advice.

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What Is a Concessionary Purchase?

A concessionary purchase occurs when a property is sold below market value (BMV) to a specific buyer. The seller voluntarily discounts the property, and the discount itself may be used as the buyer’s deposit if the lender allows it.

Common concessionary scenarios include:

• Parents selling to children at a discount
• Landlords selling to long-term tenants
• Family members assisting with property purchase
• Employers offering discounted property schemes
• Vendors wishing to complete a quick sale with a trusted buyer

The key feature is that the purchase price is lower than the property’s open market valuation.

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Can You Really Buy With No Deposit?

Sometimes, yes. In many concessionary purchase cases, the discount can act as the full deposit, meaning the buyer does not need to provide additional savings.

For example:

• Market value: £250,000
• Purchase price: £200,000
• Discount: £50,000 (20%)

Some lenders treat the £50,000 as the deposit, meaning the buyer secures the mortgage without putting in cash.

However, whether this is accepted depends entirely on lender criteria.

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When Will Lenders Accept a Concessionary Purchase as a No-Deposit Mortgage?

Lenders typically consider accepting the discount as the deposit when certain conditions are met.

1. The Seller Must Be a Family Member or a Landlord

Many lenders restrict concessionary purchases to:

• Parents or close relatives
• A landlord selling to an existing tenant

Fewer lenders accept employer or third-party concessionary arrangements, but it can still be possible.

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2. The Property Must Be Sold at a Genuine Discount

The lender will often require a valuation to confirm:

• The market value
• That the discount is genuine
• That the seller is not expecting repayment privately

Discounts typically range from 5% to 25%, but larger discounts can occur.

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3. The Seller Must Confirm the Discount Is a Gift of Equity

Lenders usually require a written statement confirming:

• The seller is gifting the equity
• No repayment is required
• The buyer has no outstanding financial obligations to the seller

This is similar to a gifted deposit, but based on property equity rather than cash.

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4. The Buyer Must Meet Standard Affordability and Credit Criteria

Even with a concessionary deposit, lenders still assess:

• Income stability
• Credit history
• Bank statement conduct
• Existing financial commitments

A no-deposit arrangement does not override the need to meet standard criteria.

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5. The Loan-to-Value (LTV) Must Fit Lender Policy

Most lenders assess the loan based on the market value, not the discounted purchase price.
This means:

• Borrowing may be capped at 90%–95% of the market value
• Even if the discount covers a deposit, the total loan must fit the lender’s maximum LTV criteria

This protects the lender in case of resale.

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Situations Where Lenders May NOT Accept No-Deposit Concessionary Purchases

While many lenders accept gifted equity, some situations can cause difficulty:

1. Seller Is Not Connected to the Buyer

Discounted sales between unrelated parties can raise concerns about the motivation behind the discount.

2. Property Has an Unusual Construction Type

Non-standard construction may require a larger deposit regardless of the discount.

3. The Buyer Has Recent Adverse Credit

Defaults, CCJs, or arrears may still require a deposit even if buying below market value.

4. The Discount Is Very Large or Very Small

A very small discount may not be enough to cover the lender’s minimum deposit requirements.
A very large discount may trigger enhanced valuation checks.

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Example Scenarios

Parent-to-Child Sale With No Deposit Needed

• Market value: £300,000
• Price offered: £240,000
• Discount: £60,000 (20%)
  Many lenders treat the discount as a full deposit.

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Tenant Buying From Landlord

• Long-term renters buying the home they live in
• Landlord offers a discount instead of selling on the open market
• Some lenders accept this arrangement as a concessionary purchase with no cash deposit

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Employer Selling Staff Accommodation at a Discount

More limited lender choice, but possible depending on:

• Employer type
• Property type
• Discount structure

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Pros and Cons of Concessionary Purchases

Advantages

• Potential to buy with little or no cash deposit
• Lower borrowing amount due to discounted purchase price
• Faster timescales if buyer and seller already know each other
• Reduced need for large savings

Limitations

• Limited lender pool
• Additional legal checks
• Some lenders require the buyer to contribute part of the deposit
• Possible restrictions on who can act as the seller
• Professional valuation required to verify discount

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Do You Still Need a Solicitor?

Yes. A concessionary purchase involves:

• Gifted equity paperwork
• Sale and purchase contracts
• ID verification
• Anti-money-laundering checks
• Lender requirements and declarations

Solicitors must also confirm to the lender that the discount is legitimate and unconditional.

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How to Prepare for a Concessionary Purchase Application

While not personalised advice, buyers commonly prepare by:

1. Getting an Up-to-Date Property Valuation

Lenders will base the LTV on the market value.

2. Ensuring the Seller Understands the Gifted Equity Process

They may need to sign declarations confirming the discount.

3. Reviewing Credit Reports

Clean, recent conduct improves approval likelihood.

4. Preparing Clear Income Evidence

Payslips, bank statements, and accounts help demonstrate affordability.

5. Gathering ID and Address History

Standard requirements still apply.

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Summary

A concessionary purchase can be a highly effective way to buy a property without a traditional cash deposit. Whether the discount can count as a full deposit depends on lender policy, relationship between buyer and seller, property value, and overall financial profile. Many lenders accept gifted equity from family members or landlords, meaning a concessionary purchase no deposit mortgage can be achievable in the right circumstances.

This article provides general information only. For personalised guidance, regulated mortgage advice is required.