The no-deposit mortgage that lets tenants buy the home they live in … with a gift from the landlord

Graham and Lisa outside the two-bedroom bungalow they bought from their landlord, with a ‘gift of equity’ – in other words, a price cut – removing the need for a deposit.Graham and Lisa outside the two-bedroom bungalow they bought from their landlord, with a ‘gift of equity’ – in other words, a price cut – removing the need for a deposit.A growing number of people are taking out a little-known type of mortgage that allows them to buy a property without having to put down a deposit.

For tenants given the chance to buy this way, it may be the best financial deal they are ever offered. And while it involves a landlord agreeing to take a lower price than they could potentially get on the open market, it also means a quicker, smoother sale – and no estate agent fees.

Terms can vary. For example, TSB and Nationwide are among those that explicitly state they do not require the tenant to put down any deposit. However, both Barclays and NatWest say buyers need to contribute their own deposit on top – a minimum of 5%. On top of that, the landlord does not have to bother finding a buyer and dealing with lots of inquiries about the property.

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