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

I have worked with Winston Solicitors on a number of different legal matters, most recently conveyancing. On each occasion, they have been professional, friendly and helpful throughout. Whether providing advice, responding to queries, or simply keeping me updated on progress, their communication has always been excellent.I would have no hesitation in recommending Winston Solicitors and would be very happy to use their services again in the future.

Anonymous

Leasa Foster was extremely efficient and professional in handing out purchase.She was very experienced and able to advise us on potential legal issues before we even started progressing with searches.I would highly recommend her services.

Michael

We used Winstons regarding the sale of our parents house. They were excellent. Amanda was so efficient...always one step ahead chasing up anything that was required from all parties. The whole process was seamless and surprisingly stressfree. Thankyou

Mary

Very thorough, good value and consistently contactable throughout a lengthy complex purchase.

Jonathan a

Brilliant support through house sale. What should have been the simplest sale in the world turned into a bit of a nightmare but Joe, Amr and the team guided us through beautifully. They were prompt with their actions, communicative and friendly. Couldn't ask for more. Thank you!

Elizabeth

Michelle was very helpful, kept everything very simple and was able to get the house move completed in the desired timeframe of around 3 months.

Anonymous

Working with Leasa on securing our first home has been incredible. We were recommended Winston Solicitors and it was the best piece of advice we were given. Seeing the professionalism and promptness of Leasa and the team to handle our case I couldn’t be happier. Thank you so much Winston Solicitors for everything, we are so happy with our home.

Sadia

We moved house again recently and there was absolutely no doubt in our minds who to use - we've used Winston solicitors for previous house moves and they were fantastic, as they proved to be yet again this time around. Leasa and Julie were our main points of contact, and were exceptional. We had a small chain but still some fairly complex issues to deal with and they handled it with ease. With all the stresses included in moving, it's great to know Winston were acting on our behalf because we knew we could trust them implicitly to handle everything with expertise. Cannot recommend highly enough!

Marc