Pepper Money has increased the maximum loan-to-value (LTV) available on concessionary purchases from 75% to 85% of the property’s full market value, giving eligible customers greater flexibility when buying a property at a discounted price from a close family member, or buying the home they currently rent from their landlord.
The change reduces the seller discount needed for eligible purchases from 25% to 15%, where the buyer borrows the full discounted purchase price. Under a concessionary purchase, the difference between the property’s full market value and the discounted purchase price can act as the buyer’s deposit. Eligible customers can borrow up to 100% of the discounted purchase price, including fees, subject to a maximum of 85% of the property’s full market value and applicable lending criteria.
For example, where an eligible buyer borrows the full discounted purchase price without contributing a cash deposit, assuming fees are paid separately, a property with a £300,000 market value would require a seller discount of £45,000 (15%) at 85% LTV, compared with £75,000 (25%) at the previous 75% maximum. The maximum loan in that example rises from £225,000 to £255,000, subject to affordability and lending criteria.
The change could help existing tenants buy from their landlord, or relatives buy from a close family member.
Paul Adams, Director of Sales at Pepper Money, said:
A close family member or landlord may be willing to sell at a discount, but a 25% reduction can be a significant concession. 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.”
Paul Adams,
Sales Director
at Pepper Money
The new 85% LTV maximum is available now, subject to Pepper Money’s usual affordability, credit and lending requirements.