Landlord Gifted Deposit Mortgage (Concessionary Purchase) Guide

If your landlord has offered to sell you the home you currently rent at a discounted price, you may be able to use that discount as your mortgage deposit.

This is known as a landlord gifted deposit mortgage, or more formally, a concessionary purchase mortgage.

In some cases, this can allow you to buy your rented house from your landlord with little or no savings — and even if you have bad credit.

As a specialist in adverse credit mortgages, I help tenants secure concessionary purchase mortgages where high street lenders often decline.

What Is A Landlord Gifted Deposit Mortgage?

A landlord gifted deposit mortgage is where:

• A landlord agrees to sell a property to their tenant

• The sale price is below full market value

• The discount is treated as the buyer’s deposit

For example:

If the property is valued at £200,000 and your landlord agrees to sell it to you for £180,000, the £20,000 difference may be treated as your deposit.

You are not receiving cash.
The deposit is created by the reduction in the purchase price.

Lenders refer to this structure as a concessionary purchase.

What Is A Concessionary Purchase Mortgage?

A concessionary purchase mortgage is where the seller provides a financial concession to the buyer.

In landlord-to-tenant transactions:

• The lender uses the full market valuation

• The mortgage is based on the discounted purchase price

• The equity created by the discount acts as the deposit

This can sometimes allow what people describe as a “no deposit mortgage”, although technically it is a mortgage using equity rather than cash savings.

Not all lenders accept concessionary purchases, and criteria varies significantly.

Can I Buy My Rented House From My Landlord With No Deposit?

Possibly.

If the landlord’s discount meets the lender’s minimum deposit requirement (for example 5% or 10%), you may not need to provide additional savings.

Example:

Market value: £200,000
Sale price: £180,000
Discount: £20,000 (10%)

If a lender requires a 10% deposit, the discount may satisfy that requirement.

However, approval depends on:

• The lender’s policy on concessionary purchases

• The valuation supporting market value

• Your income and affordability

• Your credit profile

Each lender applies different rules.

Can I Get a Landlord Gifted Deposit Mortgage With Bad Credit?

Yes — in many cases it is possible.

Whether you qualify depends on:

• Type of adverse credit (CCJs, defaults, IVA, bankruptcy)

• How recent the issue was

• Whether debts have been satisfied

• Your overall affordability

• The size of the landlord’s discount

Many high street lenders will not accept:

• Concessionary purchases combined with bad credit

• Recent missed payments

• Active IVAs or recent bankruptcies

However, there are specialist lenders who may consider:

• CCJ mortgage with concessionary purchase

• Defaulted credit

• Historic bankruptcy

• IVA mortgage applications

• Previous mortgage declines

This is where lender selection becomes critical.

Which Lenders Accept Landlord Gifted Deposits?

Not all lenders allow:

• Landlord-to-tenant sales

• Concessionary purchases

• Equity as deposit

• Adverse credit layered onto non-standard deposits

Some lenders require:

• Minimum discount percentage

• Clean credit history

• Specific documentation

• Maximum loan-to-value limits

Using the wrong lender can result in:

• A declined mortgage application

• Hard credit searches

• Delays in the purchase

• The landlord withdrawing the offer

A pre-assessment reduces this risk significantly.

What Documents Are Required for a Concessionary Purchase?

Typically lenders will request:

• Independent property valuation

• Written confirmation of the agreed discount

• Proof of tenancy

• Proof of income

• Bank statements

• Credit report

• Standard mortgage documentation

Some lenders may also require confirmation that no additional incentives or cash arrangements are involved.

Is a Landlord Gifted Deposit the Same as a Family Gifted Deposit?

No.

A family gifted deposit involves money being transferred to you.

A landlord gifted deposit involves:

• A reduction in sale price

• Equity created at completion

• A concessionary purchase structure

The underwriting process and legal structure differ.

Common Reasons Landlord Gifted Deposit Mortgages Are Declined

Applications are often declined because:

• The lender does not accept concessionary purchases

• The discount does not meet minimum deposit thresholds

• Credit issues were not assessed correctly upfront

• The valuation comes in lower than expected

• Affordability calculations fail

Specialist assessment before application can prevent unnecessary declines and protect your credit file.

Advantages of Buying From Your Landlord

Buying your rented home from your landlord can offer:

• No property chain

• No estate agent competition

• Potentially no cash deposit required

• A smoother transaction

• The ability to purchase a home you already know

For tenants with bad credit, this route can sometimes be more achievable than buying on the open market.

Why Use a Specialist Adverse Credit Mortgage Broker?

A landlord gifted deposit mortgage is not a standard high street case.

It involves:

• Non-standard deposit structure

• Specialist underwriting

• Careful lender selection

• Often adverse credit layering

I assess:

• Your credit profile

• The landlord’s proposed discount

• Lender criteria

• Affordability

• Risk of decline

Before any application is submitted.

This protects your credit score and increases the chance of approval first time.

Speak to a Specialist About Your Situation

If your landlord has offered to sell to you at a discount — or you are considering asking them — I can assess:

• Whether you qualify

• Whether bad credit will be an issue

• How much deposit you actually need

• Which lenders are suitable

• Whether a concessionary purchase structure is possible

There is no obligation and no impact on your credit score from an initial discussion.