Can you get a mortgage on a house being sold below market value?

Mike W spotted a rather strange Q&A in The Guardian, and added “If I make an offer and you accept, I always assumed that was ‘market value’. Indeed, ‘marked to market’ surely? What the hell do they mean here?”

The mortgage adviser replies: “However, not all lenders are prepared to lend to people buying property at less than market value.”

Which really is baffling. You’d expect lenders to be paranoid about lending on homes bought for more than market value, but not the other way round.
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On the subject of “below market value”, I was chatting to somebody who lives up the road who nearly got a massive sitting tenant’s discount when they bought the house they had been renting for four years. Unfortunately, the owner’s ex-wife got wind of what they’d shaken hands on and slashed the sitting tenant’s discount by about half (they still got a fairly good deal).

I told him that we got the full sitting tenant’s discount, we’d been paying rent for six years, and the owners wanted to sell. To my amazement, they accepted our cheeky offer, which was effectively the easily achievable selling price* minus five or six years’ rent.

* If they’d put in another £10,000 or £20,000 to smarten the whole house and garden up a bit (all the stuff we’ve been doing ourselves for the last six years), they could have sold it for a lot more than that, but (thankfully) they couldn’t be bothered.