Discount market sale homes: how they work, who can buy and which lenders accept them

Discounted Market Sales accepted: max 85% LTV on discounted price and, where a S106 applies, no more than 80% of open-market value (quote: Maximum 85% LTV based on the discounted sale price. Where there is a section 106 agreement, the LTV must not exceed 80% of the open market value). Same 85% for houses and flats. Product availability banded on full market value. Mortgagee-in-possession clause required, nomination period max 3 months; remortgage accepted (Discounted Market Sale (Purchase and Remortgage)).

Resale Price Covenant/DMS accepted with 5% deposit, LTV on discounted price (quote: For product selection the percentage loan to value (LTV) used will be loan amount against the discounted purchase price). New-build houses 95%, new-build flats 85% (quote: New Build Houses up to 95%. New Build Flats up to 85%); otherwise normal max LTVs apply. Resale price must be a % of market value (not an index), Affordable Housing products only, repayment only. Remortgage accepted via Affordable Housing Remortgage range; further advance max 85% of discounted value.

Restricted Resale Price accepted up to 90% LTV on discounted price (quote: The maximum LTV percentage is 90% based on the restricted value, not the open market value). New-build flats 85% (New Build LTV limits apply). Price must be a defined % of open-market value; not with shared ownership/equity loan/sheltered. Remortgage accepted (quote: Remortgages are also considered. LTV percentage is based on the restricted value).

'Discount Market Sales are acceptable providing they meet the conditions of the Affordable Housing Scheme and the discount is subsequently passed on from purchaser to purchaser' (original-purchaser-only discount = Concessionary Purchase, outside policy). 'The property value keyed represents the amount they are purchasing the property for or for a remortgage the percentage of the market value they own' (LTV on discounted price; remortgage accepted). Scheme-specific LTV not published; general max used: house purchase 95%, new build houses 95%, new build flats 85%, existing flats 90%; ask BDM how to key.

Considered only via the S106 rule (quote: Where there is a restriction on remarketing of the property e.g. Affordable Housing Schemes or Local Ownership Schemes this will be acceptable provided there is a Mortgagee Exclusion Clause). DMS not named; no scheme LTV, LTV basis, flats limit or remortgage rule published.

Dedicated product Discount Market Scheme - 2 Year Discount 95% LTV (Minimum of 20% OMV Discount). Criteria: 95% LTV on discounted price, capped at 90% of open-market value for houses and 80% for flats/studios (quote: Maximum LTV 95% of discounted purchase price. Maximum LTV of Open Market Value (OMV) 90% (houses) / 80% (flats and studios)); min discounted price 60k houses/100k flats; resale covenant must not bind the Society beyond 13 weeks. Products available for purchase and remortgage unless stated, so remortgage accepted.

Considered: affordable housing (S106) properties accepted for residential mortgages within the Society's core operating area only (quote: Social Affordable Housing Properties - Copy of the Section 106 agreement to have been approved by the Society). DMS not named; no scheme LTV or LTV basis published. General limits would apply: purchase 95%, remortgage 90%, new-build houses 90%, new-build flats 80%.

Buyer-achievable max recorded as 80% (specialist S106 range max 80%; criteria say 95% of price with LTV limited to 80%, basis unclear). Affordable housing / discounted purchase schemes: 95% LTV on discounted price, with LTV against full value limited to 80% (quote: The valuation must reflect the full value of the property and confirmation of the purchase price must be provided. The Society will lend 95% of the total purchase price, LTV will be limited to 80%). Uses the Specialist Residential range (quote: Discounted Market Value Purchases and properties with S106... max LTV 80%). Read as an 80% OMV cap, so 95% of price is reachable only where the discount is about 16% or more; if the 80% were on the price it would bind at 80%. 5% own deposit, covenants and S106 agreed by underwriter. Flats not separately limited; remortgage not stated.

Affordable Local Homes Mortgage: 'Borrow up to 95% of the property's discounted price' (LTV on discounted price); 'Available for house purchases or re-mortgages, depending on your local scheme's rules' (remortgage accepted); product guide 23.09.26 lists it at 95%. Repayment only, EPC C+, DMS agreement must include a Mortgagee in Possession Clause linked to locality or wage index; no flats-specific limit (brochure 'Not available on flats' applies to Eco Homes, not this product).

Considered: S106 / affordable housing accepted on a residential basis (quote: We consider Section 106 and Affordable Housing applications on a residential basis only); deed must show non-onerous occupancy/eligibility terms plus mortgagee-in-possession and mortgagee protection clauses. DMS not named; no scheme LTV or LTV basis published. General limits would apply: houses 95%, purpose-built flats 90%.

Same First Homes/DMS range covers other acceptable DMS schemes: live products max 80% LTV, purchase only (LTV basis not stated). Min 5% deposit, repayment only. Remortgage not accepted (range not designed for remortgage); additional borrowing direct only. Flats limit not stated.

DMV/DMS accepted: 95% LTV on discounted price, min loan 50% of discounted price (quote: The minimum mortgage advance amount is the equivalent of 50% of the discounted purchase price. The maximum LTV is 95% of the discounted purchase price). Houses only, repayment only; S106 must have a mortgagee exclusion or cascade clause. Dedicated Discounted Market Value 2 Year Fixed product. Remortgage and further advance accepted with council consent.

Restrictive Resale Price Covenant Properties (S106): 'Heartland only. Mortgagee protection clause within S106 up to 90% LTV. No mortgagee protection clause within S106 up to 80% LTV.' S106 sent for mandator approval; new build max 90% and flats max 90%; LTV basis not stated; remortgage not stated; Heartland = CA and LA postcodes.

S106 title restrictions accepted including 'discounted purchase price (LTV will be calculated based on the lower purchase price and not the market value)' (LTV on discounted price), if the restriction applies to the first sale only, a cascade starts within 3 months (none after 6), or a Mortgage Exclusion Clause applies. Scheme-specific LTV not published; general max used: 'Discounted/Tenant/Family Purchase 95%', 'New Build (Not Track Record Mortgage) 95%' (houses and flats); remortgage not specifically addressed (general remortgage max 90%).

Refer: S106 properties considered on the Flexi Fit unusual-property range to 75% LTV (purchase and remortgage); First Homes/discounted sale not named.

Refer: First Homes/discounted sale not named; properties with a restrictive covenant considered case by case via the Key Account Manager.

Refer: S106 local occupancy restrictions considered to 90% LTV of the reduced (restricted) valuation with full S106 wording required; discount/resale-price schemes not named, interest-only not available on restricted properties.

Discounted Market Sales can be considered case by case, referred via the BDM team first; general affordable housing not acceptable.

No specific DMS policy published; for new builds Pepper says it considers Section 106 planning obligations, but properties within a pre-emption period are not acceptable, so refer.

Declines restrictions requiring buyers to be in housing need or below an income cap, which most DMS schemes have. Accepted with conditions: S106 financial obligations paid or indemnified; local living/working restrictions referred; 'Restrictions relating to purchasers being in housing need, not being able to afford to purchase on the open market or having income less than a certain amount are not acceptable' (rules out most income-capped DMS). Scheme-specific LTV not published; general new-build max used: new build house and apartment 'Typical Maximum 90% LTV' (resale homes general max 95%); LTV basis not stated; affordable housing purchase or remortgage accepted subject to valuer and underwriter.

Criteria conflict: conveyancer instructions accept discounted purchases, but new-build criteria decline S106 affordability restrictions; confirm with the lender. Restricted purchase price accepted (conveyancer S106 instructions) if the borrower still benefits from market-value rises and a mortgagee exclusion clause, 3-6 month cascade or first-sale-only restriction applies; valued at the restricted price (LTV on discounted price); purchases and re-mortgages (remortgage accepted). Scheme-specific LTV not published; general max used: 95% first-time buyers / 90% home movers, new build houses 95% (FTB), new build flats 90%. CONFLICT: criteria also say 'We will not lend on any property that has a restricted occupancy clause i.e. 157 ... or 106 (relating to property affordability)' - confirm with lender.

No DMS policy published; restrictive covenants that affect resaleability are not acceptable, so contact Saffron before submitting.

No DMS policy published; Section 106 agreements are considered case by case, so refer.

Section 106 cases considered depending on the S106 wording and LTV, so contact the Business Development Team.

No DMS policy; Section 106 restrictions considered subject to individual criteria, lender maximum 80% LTV.

Most Section 106/restricted-sale properties considered by referral with full details, at a restricted maximum LTV.

Not available: AIB (NI) lends only on properties in Northern Ireland, so English First Homes / S106 discounted sale homes are out of scope.

Not accepted: properties with occupancy restrictions or onerous restrictive covenants are unacceptable, which excludes S106 eligibility-restricted discounted homes.

Not accepted: the Bank will not lend where the property is subject to any restriction in occupancy, use or resale (shared ownership/shared equity/RTB also excluded).

Discount for Sale listed as a not-acceptable scheme; no lending with covenants restricting sale price or buyer.

Restrictive covenants on title not accepted, which excludes DMS resale price covenants.

Restrictions on selling price (e.g. sold 20% under market value) cannot be considered.

Resale price restrictions (sale at a percentage of open-market value) are on the don't-lend list and Low Cost Housing Restricted Resale Covenant applications are declined.

S106 restrictions/restrictive covenants usually not acceptable outside Right to Buy and shared ownership.

Not accepted: Accord lists social housing schemes and properties with restrictions affecting resale value as unacceptable.

Not accepted: A-Z lists Discount Market Scheme as Not Acceptable; S106 covenants only accepted where limited to local living/working restrictions.

Not accepted: A-Z lists Discount Market Scheme as Not Acceptable (S106 covenants otherwise considered with a mortgagee-in-possession clause).

Not available: Central Trust does not offer purchase mortgages; remortgage of First Homes/discounted sale homes not published.

Not accepted: properties with occupancy restrictions including Section 106 restrictions are listed as unacceptable security.

Not accepted: Discount Market Scheme listed as Not Acceptable and the Society does not lend on properties with a Section 106 restrictive covenant.

Not accepted: properties subject to restrictive covenants or occupancy restrictions are listed as unacceptable property.

Not accepted for purchase: affordable housing schemes not acceptable for residential home purchase plans; refinance of affordable housing accepted.

Section 106 resale restrictions not accepted; its Discounted market sale entry covers below-market-value purchases (lend on lower of price/valuation, 5% deposit), not S106 DMS homes.

Discount Market Scheme not accepted and restricted sale price clauses not accepted.

Properties under the Discount Market Scheme are listed as unacceptable.

Discounted Market Sales not accepted.

Resale-restricted property is usually not acceptable; exceptions only where a strong case shows saleability is not detrimentally affected.

Re-sale and S106 restrictions not accepted (stated for shared-ownership leases) and occupancy-restricted properties are unacceptable.

Vernon states it is unable to consider Discount Market Schemes or properties with S106 restrictive covenants.

Discounted Market Sales / Section 106 / Section 75 not acceptable.

Low cost housing/restricted resale covenant schemes are unacceptable (other than the shared-ownership S106 cases detailed).

Not published: First Homes and discounted market sale not mentioned (schemes-not-accepted list covers Homebuy, Key Worker, shared equity and shared ownership only).

Not published: no First Homes, discounted market sale or S106 policy found (occupancy-restriction exclusion lists 11-month, age and student-only restrictions).

Not published: no discounted market sale policy; minimum loan for new clients exceeds £1.5m.

Not published: residential criteria do not mention First Homes, discounted market sale, S106 or resale restrictions.

Not published: no First Homes, discounted market sale or S106 policy found in intermediary criteria.

No DMS/discount-sale policy published; criteria list Section 106 plots as an acceptable restriction, so confirm with lender.

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Not published (later-life lender; only onerous restrictive covenants such as agricultural ties are declined).

Not published (later-life lender).

No DMS policy published; criteria grid accepts s106 properties only on the Versatility range (max 85% LTV), so confirm with lender.

Not published; restrictive covenant or occupancy restrictions considered case by case via BDM.

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Not published in current criteria A-Z or product guide.

Not published (shared ownership/shared equity/HomeBuy purchases not acceptable).

Not published: no DMS/S106 resale policy found; England lending is limited to South East postcodes via Openwork ARs, houses only.

Not published: no DMS, S106 or resale-covenant policy found in the property criteria.

Not published; Tandem is no longer accepting new first-charge applications and its criteria do not mention DMS or resale covenants.

Not published: no DMS or resale-covenant policy in the lending criteria.

Not published; S106 permitted only where the Society can sell on the open market at full market value after at most 3 months (shared-ownership rule), so confirm with Tipton.

Not published: no DMS or resale-covenant policy in UTB's residential criteria.

Not published: no DMS or resale-covenant policy in West One's residential criteria guide.