TSB has launched its new 5&5 concessionary mortgage for landlords looking to sell their properties to tenants with no deposit required.

The new product will mean landlords can offer tenants a 5% discount on the purchase price, with the buyer contributing their own deposit on top – a minimum of 5%. The loan will operate in addition to the bank’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.

Capital

Landlords can take the capital growth and use it to re-gear other properties they own or invest elsewhere.

TSB acknowledges that tenants often put rent increases down to landlords looking to squeeze as much cash out of them as possible, however, regulatory changes, tax changes and mortgage payment increases, means landlords find themselves less profitable than ever.

Roland McCormack, mortgage distribution director, says this reduced profitability is where it needs to change the narrative when discussing a landlord’s options when they approach the end of their fixed rate deal or when they are looking for advice.

Discount

“This can be a great option for the buyer as they get a discount, but also because they know the area and the property well already,” he explains.

“For the seller, it makes the process easier and smoother. They don’t have to have a tenant move out of the property, do it all up, and then wait several months – all while not receiving rent. The seller and the buyer also avoid paying fees that would normally be involved with a house sale, such as estate agent fees.”

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