Pepper has launched 100% mortgage lending to cover the full purchase price of a property for those who are buying at below market value, for example from family or their landlord.

The new criteria for “concessionary purchases” allows borrowers to buy without a deposit in some circumstances, but the loan is restricted to 75% of the property’s full market value.

Buying from family is the most common scenario for this type of agreement, but Pepper says there is growing demand from tenants looking to buy from their landlord.

Prior to this criteria update, Pepper allowed concessionary purchases using the lower purchase price for the product’s LTV and only with a 15% deposit from the borrower’s own funds.

Pepper sales director Paul Adams, Sales Director at Pepper Money, says: “This improvement to our proposition is further evidence of Pepper’s ongoing commitment to help hopeful homeowners onto the property ladder. 

“Concessionary purchase offers many benefits for buyers – not only are they able to obtain the property at a discount, but they could also secure a cheaper mortgage rate in comparison to a higher LTV rate that might ordinarily be associated with first-time buyers.

“Our specialist lending study has consistently identified that deposit remains one of the largest barriers to customers purchasing a property.

“So, the fact that this enhancement will enable buyers to borrow up to 100% of the purchase price, could be a life-changer for some customers.”