Discounted Purchase Price
Buying your home at a discount from a landlord is doable, but lenders will usually treat it differently to a discounted sale from close family.
If your landlord is selling for £205,000 and the property is worth around £245,000–£250,000, that “gap” is effectively a discount (sometimes referred to as gifted equity). Some lenders will still base their lending on the lower of the purchase price and valuation, while others will take a more pragmatic view where the case stacks up and the paperwork is clear.
How Lenders Will Look at the Discount
Because the seller isn’t a family member, most lenders will want a straightforward explanation of why the price is reduced and evidence that it’s a genuine arms-length sale. In practice, that might be as simple as the property being sold to a reliable long-term tenant at a price the landlord is happy to accept.
They’ll also want the valuation to support the numbers and for your solicitor to be comfortable that the discount is properly documented.
Income and Affordability
This is the bigger hurdle in your scenario, not the discount.
Your wife’s income may be acceptable, but zero-hours employment tends to be assessed using evidence of consistency rather than a contract that guarantees hours. Lenders that are comfortable here will usually look for a track record (often 12 months or more) and will want it to look regular and sustainable.
Your £800 per month in benefits may also be usable in affordability with some lenders, depending on what the benefit is and whether it’s ongoing. A number of mainstream lenders do accept certain benefits as income, but the detail matters.
With two children, lenders’ affordability models can vary quite a lot, so the same figures can pass with one lender and fail with another.
Deposit and Loan Size
Even with a discount, assume you’ll still need to demonstrate a genuine deposit unless the lender is explicitly comfortable treating the discount as equity and lending against that structure.
In your case, the “discount” might help reduce the effective loan-to-value, but it doesn’t remove the affordability test. If the loan required is still too high for the chosen lender’s model, the valuation won’t rescue it.
How to Strengthen the Case
This is where presentation and lender choice really matter, especially with zero-hours income and benefits.
A strong application usually includes:
- Recent payslips and a P60 (and/or a 12-month income breakdown) for your wife
- Bank statements showing the income landing consistently
- Benefits award letters and evidence they’re ongoing
- A clear note from the solicitor explaining the discounted sale and the relationship (long-term tenant, arms-length seller)
- Clean credit conduct and low unsecured debt, which you’ve already flagged as positive
What I’d Do Next
You’re unlikely to get the best outcome by going bank-to-bank yourself, because the “computer says no” lenders tend to be the least flexible on zero-hours and mixed income.
This is a classic broker case: matching you to lenders that can take a sensible view, and packaging the discount properly so it doesn’t get treated as a red flag. If you want to explore it properly, we’d take a full fact find and run it through the right lenders’ affordability models before you commit to fees.
