TSB has launched a mortgage option which it says gives more tenants the chance of buying their home from their landlord.
The lender’s 5&5 concessionary mortgage will see landlords offer tenants a 5% discount on the purchase price, with the buyer contributing their own deposit on top – a minimum of 5%.
It says these types of loans “help tenants and often first-time buyers who are hardest hit due to paying higher rent costs and having little opportunity to build their deposit to buy their first home”.
The loan will operate in addition to the bank’s 10% scheme where landlords sell their property to a tenant with a 10% discount or more on its market value, meaning the buyer doesn’t need a deposit.
The lender points out that 31% of landlords are planning to sell properties they rent out in the next two years, according to government’s latest English private landlord survey.
TSB mortgage distribution director Roland McCormack adds: “Increased mortgage costs mean many landlords want to release their gains and exit the market, and a 5% discount could be entirely offset by the savings on estate agency fees and not missing out on several months of rental payments.”
