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Thinking of buying a home from a family member? Here’s what you need to know, including the advantages, disadvantages, and why this route can sometimes make it easier for first time buyers, as lenders may take the family discount into account.
Can You Purchase a Home From a Family Member?
Yes, you can. Many people choose to buy a property from a parent, grandparent, or another close relative. It often happens when someone is ready to move onto the property ladder and the family wants to make things easier and more affordable.
Lenders are generally comfortable with these kinds of sales, though there are some specific rules and requirements that you’ll need to be aware of.
From a legal perspective, buying from family is no different from buying from anyone else; you’ll still need a solicitor, a property valuation, and a mortgage if you’re not buying in cash. The difference is usually in the purchase price, as family sales often involve a discount.
The Benefits of Purchasing a Home From Family
The biggest advantage is affordability. If you’re able to purchase at a reduced price, it may be much easier to step onto the property ladder without needing as large a deposit. In some cases, the discount can even be treated as your deposit, meaning you won’t have to save up as much money in advance.
Another benefit is flexibility. Families are often more willing to agree to terms that suit you, such as giving you more time to complete the purchase or helping with extra costs.
There can also be peace of mind, as you know who you’re buying from, and that the property has a known history.
Can You Buy a House From Family Under Market Value?
Yes, and this is where the term concessionary purchase comes in. A concessionary purchase is when you buy a property from a family member (or sometimes a landlord) for less than its full market value. For example, if a house is worth £200,000 and you buy it for £150,000, that £50,000 difference is classed as a discount.
Mortgage lenders will usually accept concessionary purchases, but they’ll want to see clear evidence of the agreed arrangement and will still require a professional valuation of the home.
How to Get a Mortgage When Purchasing a Home From Family
The process of getting a mortgage is broadly the same as any other home purchase: a lender will assess your income, outgoings, and credit history. The key difference is that you’ll need to show them the concessionary purchase details. This will usually involve:
- A professional valuation of the property.
- A written statement confirming the agreed discount.
- Proof of the relationship between buyer and seller.
It’s also important to know that not every lender offers concessionary purchase mortgages. This is where using a mortgage broker can make a big difference. For example, if you are a first time buyer or only have a low deposit, we can point you to the lenders most likely to approve your application and guide you through the process.
Why Use a Mortgage Broker When Buying From Family?
When it comes to purchasing a property from a family member, the process might look straightforward, but there are often unique rules and lender criteria to navigate.
Not every bank or building society offers concessionary purchase mortgages, and some may have stricter requirements if you’re a first time buyer or working with a low deposit.
At UK Moneyman, we work with a wide range of lenders across the market. This means we can identify the lenders most likely to accept your circumstances, whether you’re buying under market value, stepping onto the property ladder, or looking for the most competitive deal.
We’ll guide you through every stage, from checking affordability and preparing the right documents to liaising with lenders and solicitors on your behalf. With our support, you’ll have the reassurance that your application is in safe hands, giving you the best chance of mortgage approval.
