Pepper Money has raised the maximum concessionary purchase LTV from 75% to 85% of a property’s full market value.
The lender’s concessionary purchase route covers buyers purchasing at a discount from a close family member, and tenants buying the home they rent from their landlord.
The change cuts the seller discount needed from 25% to 15% where the buyer borrows the full discounted purchase price. In a concessionary purchase, the gap between full market value and the discounted price can act as the buyer’s deposit.
Eligible customers can borrow up to 100% of the discounted purchase price, including fees, capped at 85% of full market value and subject to lending criteria.
Pepper Money gave an example of a £300,000 property where the buyer borrows the full discounted price with no cash deposit and pays fees separately. At an 85% concessionary purchase LTV, the seller discount is £45,000 (15%), against £75,000 (25%) under the previous 75% cap. The maximum loan in that example rises from £225,000 to £255,000, subject to affordability and lending criteria.
“A close family member or landlord may be willing to sell at a discount, but a 25% reduction can be a significant concession,” said Paul Adams, director of sales at Pepper Money (pictured).
“Increasing our maximum LTV to 85% means eligible buyers borrowing the full discounted purchase price can proceed with a smaller concession from the seller.
“For brokers, it provides another option when helping customers whose circumstances do not fit a conventional purchase.”
The new 85% LTV maximum is available now, subject to Pepper Money’s usual affordability, credit and lending requirements.
