Getting onto the property ladder is a challenge that continues to elude many renters and first-time buyers in the UK. With skyrocketing property prices, high rents, and limited opportunities to save for a deposit, the dream of homeownership often feels out of reach. However, TSB has unveiled a new mortgage product designed to make buying a property from your landlord more achievable for tenants. In this article, I will explore the new offerings from TSB while also giving my expert opinion on what this could mean for tenants looking to buy their home.
How TSB’s 5&5 Concessionary Mortgage Works If You Are Looking At Buying A Property From Your Landlord
To kick off 2025 it seems that TSB have made helping rental tenant to buy one of their main priorities. Something that we at Oportfolio definitely get behind! So what is this new strategy that TSB have launched? TSB’s new 5&5 concessionary mortgage introduces a pathway for tenants to purchase their rented property with a unique structure and with as much ease as possible for renters who are perhaps struggling to afford a property. Under this scheme, landlords sell the property to tenants at a 5% discount on the market value. The tenants then add their own deposit, starting from a minimum of 5%, to secure the loan.
This product joins TSB’s already existing 10% concessionary scheme, where landlords offering a 10% or higher discount eliminate the need for tenants to pay a deposit altogether. According to TSB, these options are tailored for renters and first-time buyers who are disproportionately affected by high rental costs, which often leave little room for saving a deposit. Over the years there have been many schemes introduced by lenders and the UK government to help reduce deposit requirements for buyers. Undoubtedly much more needs to be done, but this is a great move from TSB.
Rising Landlord Sales Could Benefit Renters
The timing of this new mortgage product aligns with a trend in the rental market. According to the government’s latest English Private Landlord Survey, 31% of landlords are planning to sell their rental properties within the next two years. That is a huge amount, and although not great news for property investors, this is a good sign for those looking to get onto the property ladder as a first-time home owner.
Challenges For First-Time Buyers
For first-time buyers, saving for a deposit is often the largest hurdle to overcome. Recent data indicates that the average deposit for a first-time buyer in the UK now exceeds £34,500 outside London, and is significantly higher within the capital. For example, in Putney where our office is based, it isn’t uncommon for apartments suited to first time buyers being marketed for £400-500K meaning that deposits could easily reach a minimum of £50,000. Meanwhile, renters are grappling with record-high rental prices, further squeezing their ability to save.
Louis Mason, Marketing and Communications Director at Oportfolio Mortgages, based in London, explains:
“First-time buyers face a perfect storm of challenges—rising house prices, high rents, and increasing mortgage interest rates. Initiatives like TSB’s 5&5 concessionary mortgage could be a real game-changer, giving tenants a viable route to homeownership while landlords also benefit from a streamlined sale process.”
Why Buying From Your Landlord Makes Sense
Purchasing a property directly from your landlord can bring several advantages. Firstly, tenants are already familiar with the home and neighbourhood, which eliminates some of the uncertainties that come with moving. You might have lived in your property from a number of years and have really come to love the property, making it your own in everything but literal ownership. Rather than going through all the hassle of moving to a new property and new area, you may wish to stay put! Additionally, bypassing the traditional sales process could save both parties time and money, as there’s no need for estate agent fees or property marketing costs.
A Potential Solution For Renters
In my opinion, TSB’s 5&5 concessionary mortgage offers a glimpse of hope for renters stuck in the cycle of paying high rents without building equity. By making it easier for tenants to transition to homeownership, this scheme not only empowers renters but also provides landlords with an incentive to sell directly to their tenants, making everything easier for everyone involved.
As the UK’s housing market continues to evolve, creative solutions like need to be thought of and implemented. This could really pave the way for more renters to achieve the long-cherished dream of owning their own home. Whether you’re a tenant or landlord, TSB’s new product might just offer the win-win scenario you’ve been looking for. Give our team a call today if you are looking at buying a property from your landlord and we will happily talk you through your purchase and mortgage options. We are here to help.
