How To Buy Property Without A Mortgage

All property investors, at some point during their investing career, will explore the option of how to buy a property without a mortgage.

Why is this?

Well there’s many reasons. Firstly, it could be due to the investor being unable to get a mortgage due to poor credit, being overseas, having low income, or having too many mortgages in their personal name, whatever the reason the option of buying a property without a mortgage has, at some point, been appealing to everyone.

Before we discuss how to buy a property without a mortgage, lets explain what exactly a mortgage is.

A mortgage by definition is a legal agreement by which a bank or other lending body, lends money at an interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon repayment of the debt. The word mortgage comes from the latin word mortuus…which literally means ‘Dead’. In old French, Mortgage means ‘Dead Pledge’. In short…You are pledging to repay this money until you die! Nice!

So why do people use mortgages?

Well without going into too much detail, using a mortgage enables an investor or home owner to purchase a property of a higher value than the level of cash they have available. For investors, it offers an opportunity to increase your return on investment, and free up cash for future opportunities.

Traditionally the only way to buy a property without a mortgage would be to have a large pot of cash ready to invest. Well luckily for us, in modern times, there are other, more creative ways to finance your properties.

Lease Options/Rent To Buy

Lease Options and Rent To Buy are becoming an ever-popular way for tenants to get onto the property ladder by paying a rent premium to the landlord, in return for an option to purchase the property for a fixed price in the future. You don’t technically own the property until you complete the purchase, but what you do benefit from is the growth in value during the term, and providing you have the right contract in place, you could even sell the property on to another buyer, pocketing the uplift in value yourself.

The downside of this is that it is extremely complex and unknown to 99.9% of the population so is going to be many years before this really takes off.


Many investors make a very good living out of flipping property and tracking the markets. The way this works is that they purchase a property off-plan by putting down a deposit (of maybe 20-30%). Then during the build period, the prices increase through phased pricing and market price rises. On completion, the investor then sells the property on to another investor or owner-occupier at the new value, and walks away with the uplift.

The downside or risk of this is that the market doesn’t increase as much as predicted, or that the demand in the area decreases during the build period. The key to success with this strategy is securing at the right price, and buying in a prime location, but also researching what other properties are under construction. If done well, the rewards can be great.

As an example:

  • A property is worth £100,000 today
  • Investor secures it with a 20% deposit = £20,000
  • The build period is 2 years in an area with around 6% per year growth.
  • On Completion, the property is worth approximately £112,000.
  • Investor sells for £112,000, pulling out their initial £20,000, and making a further £12,000 profit, representing an ROI of 60%, or 30% per year.
  • 30% per annum ROI for very little effort…

Developer Financing

In countries like the UAE, it is the norm for developers to offer developer financing. What this means is that the buyer can stagger their payments over a longer period, even after completion, where they continue paying the developer from the income they generate from the property. The reason they are able to do this is because they are not reliant on the funds from the sale to complete the building. In other words they are cash rich!

Traditionally in the UK this payment structure is seldom seen. However there are a handful of well-capitalised developers who aren’t reliant on investor funds or pre-sales in order to finance their development.

This offers a unique opportunity for investors to purchase a property with a deposit of approximately 30%, and no mortgage. The way it works is that the developer will retain the income after completion until the balance of the purchase price has been covered. After that, the investor has a debt free property they own outright.

This will work very well for international investors who struggle to obtain lending, those with poor credit scores, and those investors who aren’t necessarily concerned about the income in the short term, but are looking to build a debt free portfolio over a mid-long term period. Equally, if the investor needs to sell before the property is paid off in full, they are quite within their right to do so. From the sale price, the balance would be cleared, and the investor would receive their initial investment back plus any uplift in the value as their profit.

UK Buy-to-Let Property Investment Guide

Access your copy of Thirlmere Deacon’s 2024 UK Buy-to-Let Property Investment Guide which contains everything you need to know about navigating the market over the next 12 months and beyond. Discover which locations are offering the best growth potential over the next 5 years.

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Get in Touch

To discuss how we can help you with your next non mortgage investment, talk with us directly, you can call us on  +44 (0) 2039507939 or send us an email at If this is your first time landing on Thirlmere Deacon Property Investments I encourage you to visit our homepage to read more about us and to see what we have on offer.

Thirlmere Deacon Property Investment UK

Thirlmere Deacon Property Investment
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7/10 Chandos Street, Cavendish Square
London, England
+44 (0) 2039507939

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