How to Buy Your Parents' Property: A Guide to Concessionary Purchase in the UK

Buying your parents' property through a concessionary purchase could save you thousands of pounds on your journey to homeownership. With UK house prices continuing to climb, many families are turning to this lesser-known option that allows parents to sell their home to children at below market value.

At Chetwood Lloyd Mortgages, we specialise in helping families navigate these unique transactions, offering expert guidance every step of the way.

Start the Conversation with Your Parents

The first step is a thoughtful, open conversation with your parents. Initiating this early gives everyone time to consider their options, seek advice, and make informed decisions.

Understanding their motivations is key. Many parents may be “capital-rich but income-poor” and see this as a way to support their retirement. Others may wish to downsize or simply prefer to keep the home in the family. However, emotions often run high around family homes, so it’s essential to approach these discussions with care.

At Chetwood Lloyd Mortgages, we recommend putting agreements in writing — through a Co-Living Agreement or Declaration of Trust — to protect all parties and avoid misunderstandings later on.

Speaking with a mortgage advisor early on (especially one experienced in family property transfers like us) ensures everyone understands the options and obligations from the outset.

Check If You Qualify for a Concessionary Purchase

Not every lender offers concessionary purchase mortgages, and requirements can vary widely.

When assessing applications, lenders typically look at:

Proof of the family relationship

Confirmation that the discount is a genuine gift, not a loan

Independent valuation of the property

Your financial stability and credit history

Property condition and living arrangements

A major advantage is that the discount provided by your parents can count as your deposit, potentially removing the need for you to save a substantial sum upfront.

Chetwood Lloyd Mortgages can help you find lenders who are favourable toward concessionary purchases and guide you through the specific documentation they require.

Get the Property Valued and Prepare Legal Documents

A professional property valuation by a qualified surveyor is essential. Lenders will base the mortgage offer on the market value, not the discounted price.

You'll also need legal documentation to confirm that the discount is a gift with no conditions attached. A solicitor will prepare the necessary gifted equity declarations.

Our team at Chetwood Lloyd Mortgages works closely with trusted solicitors who understand the nuances of family sales, ensuring a smooth and secure process.

Apply for a Concessionary Purchase Mortgage

Applying for a mortgage for a concessionary purchase is slightly different from a standard purchase. You’ll need to provide additional documents such as:

A solicitor’s letter confirming the reduced price and relationship

Signed declarations about the gifted discount

Proof of your financial standing

Chetwood Lloyd Mortgages has direct access to lenders experienced in these transactions. We know exactly what paperwork and evidence they expect, helping to maximise your chances of approval.

Understand the Tax and Long-Term Implications

When buying from parents at a discount, it’s crucial to understand the tax implications:

Stamp Duty Land Tax (SDLT): Usually based on the actual price paid, meaning potential savings.

Capital Gains Tax (CGT): Often not applicable if the parents' home is their main residence.

Inheritance Tax (IHT): If parents pass away within seven years of gifting the discount, it could impact IHT calculations.

If your parents intend to stay living in the home, additional tax considerations apply. Structuring the arrangement properly is key — and at Chetwood Lloyd Mortgages, we can guide you through how to avoid any pitfalls.

Final Thoughts

Buying your parents' property through a concessionary purchase offers a fantastic opportunity to achieve homeownership while preserving a beloved family home. However, it requires careful planning, expert advice, and clear communication to get it right.

At Chetwood Lloyd Mortgages, we’re here to make the process stress-free and successful. From your initial discussions to securing the best mortgage deal and handling legal requirements, we’ll support you every step of the way.

Thinking about buying your parents' property? Contact Chetwood Lloyd Mortgages today — your family-focused mortgage experts.

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