TSB launches new deal which gives renters discount on new mortgage
Share:
TSB has launched a mortgage which it says gives renters a chance to buy their home from their landlord. The high street Building Society has launched its 5&5 concessionary mortgage, which requires landlords to offer tenants a 5% discount on the purchase price, with the buyer contributing a minimum 5% deposit on top. The deal will also run in addition to TSB’s 10% scheme, where landlords sell their property to a tenant with a 10% discount or more on its market value, meaning the buyer doesn’t need a deposit.
TSB says the concessionary mortgage will help tenants and first-time buyers who are the "hardest hit" due to paying the highest rent costs recorded and having little opportunity to build their deposit to buy their first home. The concessionary mortgage will only be available to tenants who intend to live in the property as their main residence; alongside this, the tenant must also have been renting and living in the property for at least one year.
According to the government’s latest English Housing Survey, 31% of landlords are planning to sell properties they rent out in the next two years. TSB notes that this new 5% option could be a more "attractive option" for landlords planning a sale as they could offset the 5% discount through savings on estate agent fees or paying several months of mortgage interest while the property is empty and on the market.
Roland McCormack, Mortgage Distribution Director at TSB said: “TSB concessionary mortgages are already helping customers to bridge the gap between renting and home ownership, making it easier for tenants to secure the property they already call home. Increased mortgage costs mean many landlords want to release their gains and exit the market, and a 5% discount could be entirely offset by the savings on estate agency fees and not missing out on several months of rental payments.".
