An increasing number of landlords looking for a quick and painless exit in the run-up to the Renters’ Rights Act taking effect are opting for concessionary sales.

The deals allow a sitting tenant to buy the property at a discounted price, if the seller is willing to sell for at least 10% below market value, which means the discount can then count as the buyer’s deposit.

Although landlords take a hit on the selling price on the open market, selling to a tenant means a speedy no-strings sale and guaranteed rental income until the property eventually transfers over.

Applications

Jeni Browne, business development director at MFB, tells LandlordZONE that it's seeing more of these applications coming through. “Lenders are open to concessionary purchases, and most are comfortable with discounts of up to 10%,” she explains. However, they remain cautious with larger discounts and will base lending on the actual purchase price, not the market value. That’s why, when a client wants to access more of the equity created by a significant discount, we often use short‑term bridging finance instead.”

Exploring

Landlords are increasingly exploring concessionary sales to tenants as they seek cleaner, faster exits, particularly amid regulatory changes that are prompting some to reduce portfolio risk, adds Browne. “Selling directly to a tenant can avoid agent fees, minimise void periods, and deliver a quicker, more predictable transaction. For tenants, the opportunity to purchase at a discount can make homeownership more accessible, making it an arrangement that benefits both sides.”

Mortgage Solutions reports that Criteria Brain lists 42 of 74 lenders who will now accept a concessionary purchase between landlord and tenant. Nottingham Building Society recently changed its criteria to allow concessionary purchases from landlords and is seeing more landlords selling direct to tenants.

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