Concessionary Purchase
The minimum discount on the purchase price must be either:
- 5% of the market value with a minimum 5% deposit from the applicant.
Or
- 10% of the market value when there is no deposit.
Please see the table below for acceptable and unacceptable policy scenarios.
Concessionary purchases can only be agreed for subsequent sales (not new build) up to 100% of the purchase price (subject to normal lending limits) in the following circumstances:
The property purchase is solely for the applicant(s) to live in as their main residence and the applicant is:
- Purchasing from an immediate family member* at a discounted price and the vendor must move out on completion.
OR
- A sitting tenant purchasing from their landlord (private or council) at a discounted price. Excludes Right to Buy and Resale Price Covenants. Refer to Right to buy and Occupancy restricted properties for further details.
- To qualify, the tenant must have been subject to a tenancy agreement on the property for a minimum of 1 year.
- For joint applications, at least one client must meet sitting tenant policy.
*The only relationships permitted for a concessionary purchase are (including vice versa):
- Parent/Child
- Siblings/Sibling
- Grandparent or great grandparent /grandchild.
These relationships can include adopted, half and step family members.
If there are other parties named on the title, that don’t fall under the permitted relationship list. As long as the acceptable party is discounting their share only (and the other party/parties receive the full market value for their share) this is an acceptable concessionary purchase.
All family purchase transactions must provide vacant possession on completion. This must be a genuine discount (must not be subject to any future repayment, clawback or retained interest terms).
Policy Scenarios
|
Scenario |
Deposit |
Concession |
Policy |
|
1 |
5% |
5% |
In policy – minimum 5% deposit and concession |
|
2 |
5% |
6% |
In policy – minimum 5% deposit and concession above 5% |
|
3 |
6% |
3% |
Not in policy – concession is less than the minimum 5% (when with a deposit) |
|
4 |
0% |
15% |
In policy – concession above 10% |
|
5 |
0% |
10% |
In policy – concession 10% |
|
6 |
10% |
30% |
In policy – concession above 10% |
|
7 |
3% |
10% |
In policy – concession 10% |
|
8 |
0% |
5% |
Not in policy – minimum 5% deposit required when concession is 5% |
|
9 |
3% |
7% |
Not in policy – minimum 5% deposit required when concession is between 5% and 10% |
A valuation must be instructed in all cases including properties in Scotland (retypes are not permitted).
As the application results can differ on these cases once the correct purchase price has been keyed, you must contact The TSB Intermediary Processing Team for all applications for Concessionary Purchase. This will ensure correct underwriting of the case has been carried out at the time of application.