Discount Market Sale - UK

SenatorMendoza18

I'm hoping some posters on here can maybe share their experience of buying a property that's a part of a Discount Market Sale scheme.

Essentially these are new builds that are usually sold at 70-80% of their market value as part of an agreement between developers and the local council.

It's NOT shared ownership, and the purchaser owns 100% of the house. The main condition is that the discount is written into the land registry for perpetuity, so you buy it for 80% of it's market value, but similarly when you sell you must also sell at 80% of it's market value.

The other key facet of this is that people wanting to buy them must meet a certain criteria, e.g be local to the area and have no more than a designated combined income.

It's essentially an initiative to help low and middle earners get a foot on the property ladder.

My question is has anybody purchased a property using a Discounted Market Sale scheme? If so what were your opinions on it, and did you encounter any issues getting a mortgage? Similarly when you came to sell did you struggle to attract buyers?

Any advice would be appreciated, and thanks to anybody who's read all that

MovingForwards

Sounds like an affordable homes scheme.

Crashy_Time

Sounds like a "How can we sell overpriced property" scheme.

eddddy

SenatorMendoza18 said:

...and did you encounter any issues getting a mortgage? 

People do suggest that it's harder to get a mortgage for homes on this scheme - not all lenders will lend, and when they do, they'll only offer a lower LTV.  Probably because the properties can only be sold to people who meet the criteria, and mortgage lenders are worried that if they have to repossess, there may not be many buyers around who meet the criteria.

I guess you also need to be aware that, when you eventually come to sell, there may only be a limited pool of buyers - who may find it a bit difficult to get a mortgage.

SenatorMendoza18

Thanks for the advice. In the past 5 years there have been plenty of new developments springing up near where I live selling homes ranging in price from £145k - £400k, but it seems like the vast majority of the new builds being advertised at under £200k are a part of this Discounted Market Sale scheme.