Landlord Gifted Deposits
This situation is where a Landlord is selling a property to his incumbent tenant and the Landlord is prepared to sell the property below market value to the tenant as an incentive and concession to the tenant or just for convenience – the reason for the concession could be for any reason and any amount depending on how generous the Landlord was prepared to be. Therefore, this could allow the tenant to purchase from the Landlord at a reduced price and potentially without a deposit as the equity value in the property being gifted could be used and accepted by lender as the deposit for the purchasing tenant. The lender may insist that the gifted concession is at least worth 10% of the property value. So value = £100,000 – the gifted portion is £10,000 or 10% and you purchase the property at £90,000 with no need to pay any deposit of your own.
So this type of transaction works in exactly the same way as the Family and Relative connected purchases described in the section above only the relationship is Landlord to Tenant
Only a very few lenders are prepared to accept a mortgage application for this type of transaction so if you are interested in finding out how to arrange a mortgage on this type of basis then we would recommend that you seek Independent Mortgage Advice. Please phone 0131 202 6582 to speak to an Independent Mortgage Adviser who will be able to help you or click here.Apply now