Concessionary purchases represent a unique opportunity in the property market, often enabling buyers to step onto the property ladder under favorable financial conditions. But what exactly is a concessionary purchase, and how can it benefit both buyers and sellers?

What is a Concessionary Purchase?

A concessionary purchase occurs when a property is sold for less than its market value. This situation often arises in transactions between family members, landlords and tenants, or even employers and employees.

The Mechanics of a Concessionary Purchase

Imagine a scenario where parents wish to help their child become a homeowner. They offer their property, valued at £100,000, at a discounted price of £80,000. This £20,000 difference effectively acts as a deposit for the child, who can then secure a mortgage for the reduced purchase price

Advantages for Buyers

• Reduced Purchase Price: The most apparent benefit is the ability to purchase a property at a price lower than its market value.
• Lower Deposit Requirement: In some cases, the discount provided by the seller can serve as the deposit, reducing the upfront financial burden on the buyer.

Considerations for Sellers

• Helping Family Members: For parents, selling a property at a concessionary rate to their children can be a way to provide financial support.
• Quick Sales: Sellers looking for a swift transaction may find concessionary sales advantageous, especially if they’re selling to a known buyer.

Navigating the Process

Securing a mortgage for a concessionary purchase can differ from the standard process. It’s advisable to speak with us, who specializes in concessionary purchases to navigate the complexities involved.

Conclusion

Concessionary purchases can be a win-win for both parties, offering a practical solution for buyers struggling with high property prices and deposits. As with any property transaction, it’s crucial to seek professional advice to ensure all legal and financial aspects are appropriately handled.

Disclaimer: This blog post is for informational purposes only and does not constitute financial or legal advice.