A lender has launched a 100% mortgage product to cover the full price of a property purchased below market value, for example from a family or landlord.

The new criteria for what the lender calls  ‘concessionary purchases’ allows borrowers to buy with no deposit in some circumstances, but the loan is restricted to 75% of the property’s full market value.

Pepper says there is growing demand from tenants looking to buy from their landlord in this way. 

Pepper sales director Paul Adams, says: “Concessionary purchase offers many benefits for buyers – not only are they able to obtain the property at a discount, but they could also secure a cheaper mortgage rate in comparison to a higher LTV rate that might ordinarily be associated with first-time buyers.

“Our specialist lending study has consistently identified that deposit remains one of the largest barriers to customers purchasing a property.

“So, the fact that this enhancement will enable buyers to borrow up to 100% of the purchase price, could be a life-changer for some customers.”