TSB has launched a mortgage which it says gives tenants a chance to buy their home from their landlord.

The lender’s 5&5 concessionary mortgage works by requiring landlords to offer tenants a 5% discount on the independently-assessed value, with the buyer contributing their own deposit of a minimum of 5%.

It says these types of loans “help tenants and often first-time buyers who are hardest hit due to paying higher rent costs and having little opportunity to build their deposit to buy their first home”.

The loan will operate in addition to another TSB scheme under which 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.

The lender points out that 31% of landlords are planning to sell properties they rent out in the next two years, according to government’s latest English Housing Survey.

TSB mortgage distribution director Roland McCormack adds: “Increased mortgage costs mean many landlords want to release their gains and exit the market, and a 5% discount could be entirely offset by the savings on estate agency fees and not missing out on several months of rental payments.”