Landlords looking to exit the sector by selling to sitting tenants have a new financing option after Nottingham Building Society announced it will accept concessionary purchases at discounted prices.
The lender has also expanded its criteria for ex-local authority flats, opening up a market segment estimated at around one million properties across the UK. These changes reflect the growing number of landlords choosing to sell rather than continue operating under tighter regulations.
New lending criteria for landlord sales
Nottingham Building Society will now lend on concessionary purchases, where private landlords sell to existing tenants at a price below market value. This arrangement benefits both parties – the tenant gains an affordable route to ownership while the landlord achieves a quick sale without estate agent fees or void periods.
The society will also lend on any flats previously owned or managed as social housing but now in the private market, accepting these properties at up to 85 percent loan-to-value across both residential and buy-to-let mortgages.
This follows Landlord Knowledge’s report on the £48bn contraction in the private rental sector, which highlighted how many landlords are seeking orderly exits from the market ahead of the Renters Rights Act.
Deposit flexibility for self-employed buyers
The changes also help self-employed buyers – potentially including landlords purchasing additional properties. Self-employed applicants can now use the repayment of a director’s loan as a deposit source, provided the repayment is fully evidenced.
House builder gifted deposits are now accepted on new-build properties, provided the borrower matches the gift with their own funds. This could help first-time buyers competing with investors in new developments.
Matt Kingston, sales director at Nottingham Building Society, said the changes reflect market realities. “Ex-local authority flats form a huge part of the UK’s housing stock, yet support for them remains patchy,” he said.
“Landlords are increasingly selling directly to tenants. Self-employed customers are relying more on legitimate capital flows. And new build purchases can be made possible only when housebuilders step in to help with deposits.”
Kingston added: “None of these are niche scenarios. They are the reality of today’s property market. Our role as a modern and specialist mutual is to respond to real-world circumstances with clarity and common sense.”
With rental competition falling to a six-year low, the changes suggest lenders are positioning themselves to facilitate market transitions rather than simply chasing new landlord business.
What this means for landlords
- If you’re considering selling to a tenant: This opens a financing route that could speed up the process and benefit both parties.
- Watch for: Other lenders may follow with similar concessionary purchase products as landlord exits accelerate.
- Bottom line: Selling to a sitting tenant avoids void periods, agent fees, and market uncertainty – worth considering for landlords planning their exit.
Editor’s view
This is a practical response to market conditions. Many landlords want out; many tenants would buy if they could. Making concessionary purchases easier to finance removes a friction point. It’s not a solution to the rental supply crisis, but it’s a sensible way to handle the transition.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 16 March 2026
Sources: Nottingham Building Society
Related reading: Private rental sector shrinks £48bn as landlords exit market
