Purchasing property from family living there so I can take out a mortgage on it for works

kingstreet

With whom have you booked an appointment? Hopefully an experienced independent mortgage broker?

You will have a problem with most of the "normal" lending market because there will be an expectation the current owner(s) will vacate the property. This is due to the potential legal issues of repossession in such circumstances.

Nationwide view, as an example;-

Concessionary Purchase/Genuine Bargain Price

Concessionary Purchase/Genuine Bargain Price is where the property is knowingly being purchased by your client below the market value. The purchase can't be part of a recognised scheme such as Right to Buy or Shared Ownership.

Applications where solicitors are recording the purchase price as the full market value should be keyed as standard with a gift of equity as deposit.

Only applications that are recorded by the solicitor at the reduced price should be keyed as Genuine Bargain Price.

Acceptable scenarios

• Interfamily sale (buying from a relative)
• Employee buying from their employer
• Private tenant buying from their landlord

Lending terms

• The discount must be a gift, not a loan, and there must be no conditions attached to it.
• A deposit is not required unless the loan exceeds our maximum LTV.
• LTV is calculated using the open market value with a maximum of 90%.
• We will not lend more than 100% of the discounted price on a Genuine Bargain Price.

Lifetime Tenancy

If your client is purchasing a property, and the current occupier will remain in the property but won’t be on our mortgage, and a Lifetime Tenancy has or will be created on or before completion, we’ll decline the application.

https://www.nationwide-intermediary.co.uk/lending-criteria/purchase-types#concessionaryPurchase