Residential policy
An undervalue purchase or use of gifted equity as deposit for a purchase is acceptable when buying from a family member. The seller cannot live in the property after it has been sold.
How it works
The LTV will be calculated on the property value instead of the purchase price and we will not lend more than the discounted purchase price.
For example, on a property valued at £200,000 sold at a discount for £150,000, we’d lend up to £150,000 and calculate the LTV as 75%.
Conditions
The legal rep must establish that the family member selling the property is not insolvent and/or arrange suitable indemnity insurance for the full value of the property, and the buyer and seller must have separate legal representation.
We will need a letter from the family member(s) gifting the equity to confirm that it is a gift and they do not expect to be repaid during the recipient’s ownership of the property or on its sale.
We do not allow a remortgage within 6 months of being gifted a property.