Gifted funds

Buying a home with the help of your parents

First time buyers are finding the only way to jump onto the property ladder is with the help of “the Bank of Mum and Dad." Parents help out their children to buy their first home by way of giving them the funds. This may be considered an early heritance with money that would be coming their way in due course and parents are happy to pass it on to their children who need it.

What to expect when parents help buying your house
Proving source of funds for your house purchase

Call us on 0113 320 5000

What happens when you buy a house with the help of your parents?

When funds for a house purchase are gifted or loaned, the buyer’s conveyancer will need to carry out additional checks alongside the usual conveyancing process.

The extra checks when house purchase funds are gifted or loaned include:

EVIDENCE: asking for evidence of identity and proof of address in respect of each giftor.
PROOF: Asking for proof of funds and evidence of the source of the funds.
IDENTITY: Carrying out electronic identity checks in respect of each giftor.
SEARCHES: Carrying out bankruptcy searches in respect of each giftor.
CONFIRMATION: Asking for confirmation of the amount of the gift.
GIFT or LOAN: Asking for confirmation that it is a gift, that no part of the gift is repayable, that each giftor will have no stake in the property, and that no giftor will live at the property. We can assist you with a gifted deposit letter
LEGAL ADVICE: Recommending that each giftor obtains independent legal advice. This is particularly important because:
- Making a gift may have inheritance tax implications.
- A gift may not be the best option from the funder’s point of view. It may be preferable for the funder to secure a stake in the property by means of a Trust Deed or mortgage, protected by an entry on the register of title. This will ensure that the property cannot be sold without the funder’s consent, unless the mortgage lender repossess it.
COMMUNICATION: Referring the matter to any mortgage lender who is involved with the property purchase.

Proving source of funds for your conveyancing

It’s a legal requirement to prove where the funds come from when you buy a property. Conveyancers have a duty to guard against mortgage fraud and money laundering and must take steps to ensure that all funds used to purchase a property have been acquired in a legal way. If all the boxes are ticked and the conveyancers have no suspicions, lenders are normally happy to lend where gifted deposits are provided, but may be more reluctant where the funder wishes to claim a stake in the property.

You can find out more about Mortgage Gifted Deposits here

Call our conveyancing team on 0113 320 5000

A ‘giftor’ is the legal term given to the person giving the financial gift. Have a look at our legal glossary of conveyancing terms for further explanations of the terms used in the conveyancing process.

To discuss buying a property with the help of gifted or loaned funds please contact our experienced conveyancing team on 0113 320 5000 or email conveyancing@winstonsolicitors.co.uk

Client feedback

Excellent job by Michelle with my conveyancing. Clear communication. Rapid responses. Everything you could want.

Graham

Michelle was our conveyancer for our recent house purchase. Her professionalism, thoroughness and quick responses throughout the process made the purchase as easy as possible for us - we are very grateful to her and the rest of the team at Winston Solicitors for their work.

Anonymous

had a great experience with winston solicitor company. The team was professional, friendly, and helpful throughout the whole process. Joe Rawnsley was fantastic. He kept me informed, answered all my questions, and made everything straightforward and stress-free. I’m very happy with the service I received and would highly recommend them to anyone looking for a reliable and trustworthy solicitor.

Bijan

They are very quick in replying and clarifying your questions. Also very smooth transaction process overall.

David

I have now used Winston’s for a number of services and highly rate them all round. My most recent experience was of their conveyancing team who have again been helpful from start to finish with the sale of my previous property and new purchase. The new purchase was not straight forward but Winston’s managed this extremely well with even the estate agent noting how helpful they were. I’m very appreciative to Michelle for her all her help with this

I used this practice for the conveyancing services (Michelle Ayres specifically). I could not recommend this practice more. I was away working outside of England for much of the time my house sale went through and I could not fault the communication, professionalism and advice I was given. Emails were responded to in a timely manner, they were fantastic throughout all negotiation with my buyer, were brilliant in explaining anything “legal speak” offered appropriate advice and really pushed on this process to ensure it moved from offer to exchange and completion. Really couldn’t recommend more.

Miss B

We couldn’t recommend Leasa highly enough. She was absolutely brilliant throughout the entire process of buying our first home.The purchase ended up being a fairly long and complicated process, with a number of delays and issues along the way, but Leasa was incredibly patient, responsive and reassuring throughout. She always took the time to explain things clearly, answer our questions and make sure we understood what was happening, which made a huge difference as first-time buyers.We always felt that she genuinely had our best interests at heart and was working hard to keep everything moving, even when things were outside of her control. Her communication was excellent, and we always felt we could get in touch whenever we needed help or clarification.Buying a home can be stressful, but having someone as knowledgeable, helpful and kind as Leasa made the whole experience so much easier.We’re incredibly grateful for everything she did to help us finally get the keys to our new home. We wouldn’t hesitate to recommend Leasa to anyone looking for a conveyancing solicitor, and we would absolutely use her again in the future.Thank you so much, Leasa!

Hannah

We used Winston recently for conveyancing, we are a slightly unorthodox and there were changes along the way. They were accommodating and patient with excellent regular comms. Recommended

Lee