Can I buy my parents' house below market value?

Yes, this is called a concessionary purchase. The discount is treated as gifted equity, acting as your deposit. Most lenders accept family concessionary purchases.

Do I need a deposit if buying below market value?

Not always. If the discount from market value is large enough, the gifted equity may be sufficient. For example, a 15% discount on a family sale could mean no additional deposit is needed.

How do lenders value BMV properties?

Lenders will instruct an independent valuation regardless of the purchase price. They'll lend based on the lower of the purchase price or valuation, but calculate LTV based on the market value.

Can I buy from a friend below market value?

Some lenders accept non-family concessionary purchases, but criteria are stricter. The relationship will be scrutinised more closely for anti-money laundering purposes.

Below Market Value Mortgages

Buying below market value can be a great deal — but lenders have specific rules about BMV purchases. We navigate the criteria and find you the best mortgage.

Mortgages for Below Market Value Purchases

Buying a property below its market value (BMV) can happen for various reasons: family sales, auction purchases, repossessions, or motivated sellers. While it sounds like a straightforward win, mortgage lenders have specific rules about BMV transactions — particularly around gifted equity, anti-money laundering checks, and how they calculate your loan-to-value ratio.

Understanding of lender rules on BMV purchases
Family concessionary purchase expertise
Gifted equity calculations explained
Anti-money laundering requirements navigated
100% fee-free specialist advice

Step 2 of 4

Tell us about the property

Estimates are fine — we'll refine the numbers together.

Property Value (£) *

Deposit Amount (£)

Annual Household Income (£)

Your home may be repossessed if you do not keep up repayments on your mortgage.

Family Concessionary Purchases

Buying from a family member at below market value is the most common BMV scenario. The discount is treated as 'gifted equity', which effectively acts as your deposit. For example, buying a £200,000 property for £160,000 gives you 20% equity from day one. Most lenders accept this, but they'll want to verify the family relationship and ensure there's no coercion.

Auction and Repossession Purchases

Properties bought at auction or from receivers often sell below market value. Lenders are generally happy with these purchases, but they'll value the property independently and lend based on the lower of the purchase price or valuation. You'll also need to complete quickly — typically 28 days for auction purchases.

How LTV Is Calculated on BMV

When you buy below market value, most lenders calculate your LTV based on the full market value rather than the purchase price. This means the discount effectively becomes equity, potentially giving you access to better rates. For example, if a property is worth £200,000 and you buy it for £170,000 with a £150,000 mortgage, your LTV is 75% (based on market value) rather than 88% (based on purchase price).

Anti-Money Laundering Checks

Lenders and solicitors will scrutinise BMV transactions more closely than standard purchases to comply with anti-money laundering regulations. They'll want to understand why the property is being sold at a discount and verify the relationship between buyer and seller (if applicable).