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

Sidraa did the conveyancing on our recent house sale and purchase and she was outstanding. She is so thorough but also keeps you constantly updated removing a lot of the anxiety about the process. She was also ably helped by Paulo. Thank you for all the hard work you put in on our behalf.

Kathryn

Great from start to finish. Kept updated at all times. Michelle was also good at replying to my emails,I would highly recommend to anyone.

Jonathan

Lease has been amazing getting all my documents ready for my house purchase, she was rapid at responding to my email and replying back to any queries I had. I would surely recommend it Winston solicitor to my family and friends.

Fatima

I used Winston solicitors for the purchase of my first home. They were absolutely fantastic, especially Michelle who was my solicitor. She was so kind and friendly. She answered every question I have and was very responsive and easy to get a hold of. I highly recommend Winston solicitors and Michelle especially:)

Tomas

We recently worked with Sidraa when buying a property. She was very efficient, thorough and a pleasure to deal with.

Joanne

It was really an excellent experience with your organization. The engagement was seemless and professional. We were guided objectively. Thank you for providing a good and friendly service for our mortgage till the key was exchanged and after services follow up. Leasa Foster thanks to you specially for a good well done from the beging of our trasaction till the end. You did well and be rest assured of my referral.

Hammed

Michelle Ayres at Winston Solicitors delivers a first class conveyancing service. Michelle is diligent and conscientious and gave clear communication, throughout the process, about what was required to complete each conveyancing stage.Michelle is patient and supportive too - something we very much appreciated during the stressful sale period.We would recommend Michelle Ayres and the Winston team to anyone who is looking for a trustworthy and reliable conveyancing solicitor.

Anonymous

This is the fourth time we have trusted Winston Solicitors - Sidraa Razaq in particualr! Amazing, efficient, and fast service each time. There has never been a delay from her end. Many estate agents always pester us with their own partner solicitors but we always kindly reject them and choose Sidraa. We would always recommend Sidraa and her team!

Tariq