This will allow borrowers to buy a property for less than the market value. Pepper Money said while these purchases often happened between family members, it would also offer this to tenants who wanted to buy property from their landlords.
The lender said these purchases between landlords and their tenants were becoming more frequent, so it made this change cater to this demand.
Pepper Money already allowed concessionary purchases but required a lower purchase price for the mortgage loan to value (LTV), which required borrowers to have a 15% deposit.
Now, no deposit will be required and purchases can be made up to 75% of the property’s full market value, meaning borrowers can get a 25% discount.
Paul Adams, sales director at Pepper Money, said: “This improvement to our concessionary purchase proposition is further evidence of Pepper’s ongoing commitment to help hopeful homeowners onto the property ladder. Concessionary purchase offers many benefits for buyers – not only are they able to obtain the property at a discount, but they could also secure a cheaper mortgage rate in comparison to a higher LTV rate that might ordinarily be associated with first-time buyers.
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“Our Specialist Lending Study has consistently identified that deposit remains one of the largest barriers to customers purchasing a property. So, the fact that this enhancement will enable buyers to borrow up to 100% of the purchase price could be a life-changer for some customers.”
He added: “We’ve made these changes in response to feedback gained from our broker partners in the forums we regularly hold. Brokers play such a key role in shaping our proposition and ensuring we’re all able to assist our customers better.
“We’re delighted to have launched [these] improved criteria today.”
