Buying from private landlord with no deposit

Gem82

Today my bank (Lloyds) called me for an 'account review'. Whilst talking she said to me that if my landlord was willing to sell me the property we rent then we could get a mortgage without the need for a deposit.

This sounds strange, and expensive - has anyone heard of this?

I have done a bit of googling and can't find anything about it online!

Thanks

theartfullodger

Is your landlord the council or a housing association.?

davidmcn

theartfullodger wrote: »

Is your landlord the council or a housing association.?

I presume "private landlord" means no.

OP, 100% mortgages are fairly rare these days and I haven't heard of buying from your landlord making it a special case. You'd probably be best to ask the bank for more information. Do you know whether your landlord actually wants to sell?

eddddy

It sounds like Lloyds were talking about a Concessionary Purchase.

I suspect that you have missed a very key piece of information - your Landlord must sell to you at a discount. And the discount must be at least 10%.

So if the property is valued at, say, £200k - your landlord must sell it to you at no more than £180k.

i.e. Your landlord is essentially giving you a 'gift' of £20k to use as your deposit.

(And not many landlords like their tenants enough to give them a gift of £20k. Most of them would prefer to sell at the full price of £200k.)


FWIW, here's the info from Halifax's (Lloyds Banking Group) website:

Concessionary Purchase

Concessionary purchases can only be agreed for subsequent sales (not new build) in the following circumstances:

The property purchase is solely for the applicant(s) to live in as their main residence and the applicant is:

...

A sitting tenant purchasing from their landlord (private or council) at a discounted price (minimum of 10% discount is required). This excludes Right to Buy.

Link: https://www.halifax-intermediaries.co.uk/print/criteria/mortgage/default.aspx?isfad=0

Gem82

eddddy wrote: »

It sounds like Lloyds were talking about a Concessionary Purchase.

I suspect that you have missed a very key piece of information - your Landlord must sell to you at a discount. And the discount must be at least 10%.

So if the property is valued at, say, £200k - your landlord must sell it to you at no more than £180k.

i.e. Your landlord is essentially giving you a 'gift' of £20k to use as your deposit.

(And not many landlords like their tenants enough to give them a gift of £20k. Most of them would prefer to sell at the full price of £200k.)


FWIW, here's the info from Halifax's (Lloyds Banking Group) website:

Yes this sounds like it...I just. Can't see why any landlord would want to give that kind of discount?! Seems bizarre...

System

If they are willing to sell agree a price then add the 10% for the asking price. Providing its close to the value of houses around you then how would the bank know

SuperHan

Simonr66 wrote: »

If they are willing to sell agree a price then add the 10% for the asking price. Providing its close to the value of houses around you then how would the bank know

They would carry out a valuation...

need_an_answer

Is this something you are considering because it was bought up as part of your account review?

Not wishing to burst any bubbles but whilst LLoyds offer this facility it really is something that only your LL can agree to and to be honest I think many LL's probably wouldn't entertain the idea.

Its more likely that the account review whilst they are not going to "sell you anything" is designed to get you thinking about the products and services they offer...designed to get you thinking so that potentially at some point you go back to them to get some more information....


However how fruitful that thought process is really does depend on if your LL is in the position to want to sell...

Some LL's may want to sell,but many wont...don't hold that against your LL if the answer were to be no....

System

SuperHan wrote: »

They would carry out a valuation...

I know they would do a valuation hence me saying


"If they are willing to sell agree a price then add the 10% for the asking price. Providing its close to the value of houses around you then how would the bank know "

gingercordial

Simonr66 wrote: »

I know they would do a valuation hence me saying


"If they are willing to sell agree a price then add the 10% for the asking price. Providing its close to the value of houses around you then how would the bank know "

But then as soon as the landlord sees that valuation they will know that they could get 10% more on the open market so why sell to OP at what they now know to be a discount?

System

gingercordial wrote: »

But then as soon as the landlord sees that valuation they will know that they could get 10% more on the open market so why sell to OP at what they now know to be a discount?

Because it would basically be the same as a Vendor gifted deposit, I did this a few years ago. I agreed a purchase price then added added 5% and said the vendor is gifting the deposit. Hence me saying AGREE a purchase price and then add 10% making sure the value is in line with similar properties in the area. Its called negotiation and anyway the landlord may not want to sell in the first place


Seems really simple to me