Mortgaging a Property Purchased at Under Market Value

Discover the optimal ways to apply for a mortgage, even if you've been stung with a poor property valuation or know the residence in question isn't yet worth the market value you'd like to borrow.

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Based on your yearly income, you may be able to borrow:


Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.


Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.


Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Mortgaging a Property Purchased at Under Market Value

If you have seen a property marketed for a fast sale at lower than market value, the chances are you will be keen to snap it up!

However, we have lots of enquiries from people looking to buy a property from a relative, or looking to pick up a property being sold to repay debts, and needing to know how the process works, and if a mortgage is likely to be any different from usual.

This guide summarises the mortgage process for properties sold at less than market value, and what categories these might fall into. For more information, or to get your mortgage application started, call Revolution Brokers on 0330 304 3040, or drop us a message to

Is It Difficult to Get a Mortgage for a House Purchase at Under Market Value?

Not particularly, no - although the lender may ask for more information about the pricing.

For example, suppose you're buying a property from a family member. In that case, the lender will need to analyse the circumstances and assess true market value before making an offer to lend.

What is a Concessionary House Purchase?

This term is used to describe the sale of a property at under market value between family members. Some lenders might even consider the difference between the transaction value and the market value in lieu of a deposit.

There are a few plus points, and criteria to look out for:

  • If the discount is considered a deposit, you could get a 100% mortgage with no deposit required.
  • Usually, this option is only available to sales between immediate family members.
  • Requirements can be complex, and so an experienced broker is vital.

Why Do People Have the Option of Buying a Home Under Market Value?

In many cases, there might be a misconception that selling a property for less than it is worth is breaking the law, or is unethical - but there is no reason you cannot choose to do this.

Common examples include:

  • One family member selling a property to another - often a parent is selling to a child to help them get onto the property ladder, while also saving estate agents fees.
  • Seller undervaluing their home to achieve a faster sale - sometimes this occurs after a divorce, or the beneficiary of a Will may need to sell inherited property to settle the tax obligations arising from their inheritance.
  • Needing to liquidate property assets quickly to cover debts - homeowners in financial difficulty may choose to sell their home to repay the debt and avoid a repossession scenario.
  • Auction properties - often auctions have a reserve price, which is the minimum acceptable. That minimum can often be below market value. Some auction properties are repossessions, and therefore being sold on behalf of a claimant bank.

If I Buy a House at Under Market Value, is there a Tax Liability to Pay?

There can be, particularly if you are buying from a family member:

  • Capital Gains Tax is paid on the profit you make from selling a property but isn't usually payable when you sell your primary home. If the property is a second home or part of a portfolio, a tax liability may arise.

For example, if your parents bought a home for £100,000 that now has a market value of £200,000, they might sell it to you for £150,000. Therefore, the taxable gain is the increase in market value, not the actual price you have paid.

  • Stamp Duty is payable on a new property purchase, and depends on how much you pay, rather than market value.

Therefore, if you buy a property at under market value and it falls into the bracket below, you can significantly reduce your Stamp Duty costs by paying less.

  • Inheritance tax is possible, as the discount offered on a family property sale can be considered a lifetime gift.

For example, if you buy a property from a parent that is worth £500,000, and only pay £300,000, then the £200,000 difference is a lifetime gift.

If the parent passes away after seven years, you are exempt from inheritance tax but could be liable for the full 40% of the £200,000 gift if they were to pass away within three years.

Professional Assistance with Property Purchases at Under Market Value

Business finance broker are specialists in non-standard mortgages and have whole-of-market access to recommend any product from any lender that we feel is best suited to your circumstances.

We work with a vast network of niche lenders, negotiating terms on your behalf to ensure you get the best possible deal.

Contact the team for assistance with any mortgage requirements for concessionary purchases or properties below market value on 0330 304 3040, or email us at

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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