The concessionary purchase strategy that helped a tenant secure affordable home ownership

Concessionary purchase: turning a tenant’s deposit gap into affordable home ownership

Buying a home while renting can be challenging, especially when the deposit is the main hurdle. In this case, a concessionary purchase created a practical route to ownership by aligning the interests of both the tenant and the landlord.

The tenant was already living in the property and was well placed to proceed with a mortgage. The sticking point was deposit size: even with savings, the required deposit level could not be met on the purchase price the landlord intended to sell for.

Rather than pursuing a standard sale—typically involving notice periods, potential voids, and selling costs—the landlord explored a different approach. By offering the property directly to the tenant and agreeing a modest discount, the transaction could be structured so the tenant’s deposit position improved without the tenant having to find additional funds at short notice.

How the strategy worked

The arrangement used the concept behind gifted deposit / gifted equity to support the tenant’s deposit requirements.

1) A concessionary purchase price

The landlord agreed a discounted purchase price compared with what would normally be expected in a market sale. This discount was central to the strategy because it allowed the deposit to be assessed in a way that supported the mortgage structure.

2) A concessionary purchase mortgage at high loan-to-value

A high loan-to-value concessionary purchase mortgage was used. In broad terms, this type of lending can be designed for situations where the borrower is buying with a smaller deposit than would typically be required, provided the overall structure meets the lender’s requirements.

3) Combining savings with gifted equity

The tenant contributed £9,000 from their own savings.

In addition, the landlord provided approximately £4,500 as gifted equity. Together, the tenant’s savings and the gifted element supported the deposit level needed to proceed.

Why staying put mattered for both sides

A concessionary purchase can be more than a mortgage solution—it can also reduce disruption.

For the tenant

• Avoided moving costs and disruption, since the purchase was based on remaining in the same home.
• Maintained continuity, including day-to-day routines and local arrangements.
• Reduced uncertainty, because the tenant already knew the property and could buy with confidence in its condition.

For the landlord

• Reduced the risk of a void period, helping protect cash flow.
• Minimised selling costs, such as estate agent fees and other expenses associated with a traditional sale route.
• Supported a smoother exit, while still achieving a financial outcome close to what a conventional sale might deliver.

The outcome

In this case, the tenant secured a fixed-rate mortgage for 5 years with no arrangement fees and monthly repayments of £625.

The case also notes that this was around £50 less than the market rent for a similar property in the area.

Note: mortgage rates and fees vary by lender, product and individual circumstances. This case study is an example of what was possible, not a guarantee of the same outcome.

What this case study illustrates

This scenario shows how a concessionary purchase strategy can create a genuine “win-win” when:

• the tenant has mortgage capacity but needs help meeting deposit requirements,
• the landlord is willing to structure a discounted sale, and
• the transaction is arranged so the gifted deposit/equity elements align with the mortgage approach.

For home buyers considering similar routes, the most important starting point is understanding how deposit structure, purchase price, and mortgage design interact—so the plan can be built around what lenders can accept.