The Intermediary – July 2026 - Flipbook - Page 25
FIRST-TIME BUYERS
In focus
Family concessionary
sales could become
a wider trend
I
f you look at the way we talk
about the property market in
the UK, you’d think the only
way for a 20-something yearold to buy a house is if their
parents happen to be siing on
a mountain of spare cash.
Oentimes, people tend to speak
about the ‘Bank of Mum and Dad’
like it’s a cash-printing machine
where gied deposits simply
materialise overnight.
But in reality, very few parents have
£50,000 or more just lying around in
cash savings.
Most parents aren’t cash-rich,
but they may own a house. Even
though 63% of households in the UK
do live in an owner-occupied home,
under-30s own just 2% of the UK’s
owner-occupied housing stock, worth
£130bn, while £3.84tn of the UK’s
housing wealth is owned by over-60s,
according to Savills.
Many of these are traditional
family homes that are now far too
big for those living in them, while
their adult children are stuck paying
astronomical rents and struggling
to save up a meaningful deposit to
purchase a home of their own.
Instead of waiting around to leave
the house to the children in a will, a
lot of parents are starting to realise
they can do something right now.
This realisation has led to a growing
demand for family concessionary
purchases, through which a house
is sold to a family member at a
significant discount.
Many are also finding that it is
potentially more tax-efficient in
the long run than property le to be
inherited in an estate, which may
incur Inheritance Tax (IHT).
Additionally, by passing on the
property equity as a discount, parents
can enjoy seeing their children benefit
MARIE GRUNDY
is managing director of
mortgages at West One Loans
now, rather than leaving them to
navigate a complex estate later.
Specialists succeed
The specialist mortgage market really
comes into its own for these types of
transactions. Specialist underwriters
can examine the case manually and
can also consider cases where would be
purchasers also need access to lenders
who look beyond a credit score. This
can be particularly beneficial for
younger first-time buyers with a
limited credit history.
Take the example of a £100,000
discount on a £400,000 property
which would be accepted as the
deposit, meaning the family member
gets a mortgage with a £300,000 loan
size, puts down zero cash of their
own, and instantly owns a home
with a large portion of equity already
built into it at 75% loan-to-value
(LTV) rates.
The practical benefit on the other
side of the deal is that the parents are
able to access equity they may have
built up over many years from the sale
of the property. This can enable them
to downsize potentially on a mortgagefree basis.
It makes sense for everyone
involved, because the parents get to
downsize without the stress of dealing
with property chains or open-market
buyers, and they get the genuine joy of
watching their children start a life in
the old family home while they get a
foot on the ladder without the pressure
of saving for a deposit.
In the coming years, these kinds
of transactions are likely to grow in
prominence as the proverbial ‘great
wealth transfer’ takes place.
It will take a bit of human
underwriting and some flexible
thinking from specialist lenders to
set it up, but it can be a much more
fulfilling experience now for both
parents and their children than the
typically stressful experience of
probate and estate administration later
down the line. ●
As affordability pressures mount, family concessionary sales may shift from niche to norm
July 2026 | The Intermediary
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