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

High recommendations for Michelle Ayres from Winston Solicitors. She was always quick, on point and proactively solved an issue with incomplete title documentation. Her updates were always precise and response time was within hours. We are hugely grateful for the smooth sale and we hope more people discover and use Winston Solicitors!

Mr Stoyanov

Leasa at Winston’s was amazing when dealing with our first house purchase. She was so quick at replying to any queries we had and always chasing up the other side to make sure things were progressing. She made us feel reassured through the stress as she really knows her stuff. We couldn’t recommend Leasa enough! Thank you!

Demi

Excellent efficient service. Kept well informed throughout. Would use again. Good service is a rarity these days.

Andrew

Winston’s yet again have been fantastic, highly professional and I would highly recommend. The chart tracker is great so you can always see where you are with everything. Joe Rawnsley and Samantha Robertson Strong have gone above and beyond. Thanks so much to you both.

Sarah

My financial adviser had recommended Leasa Foster from Winston Solicitors to support on my purchase of a house as a first time buyer. She demonstrated professionalism throughout all our interactions whether it be verbally or via emails. She provided clear instructions and guidance throughout the different stages and steps of transaction. She was prompt in addressing any queries that I had raised and I felt well-equipped with the information I needed to make decisions throughout the process. I was kept up to date with the progress of the transaction constantly. She was pro-active in following up all other relevant parties to ensure that we complete the steps of the purchase in a timely manner. Furthermore, at a crucial point of the transaction when Leasa had been on leave, her colleague had readily taken over the transaction seamlessly to avoid any further delays. Overall, I would highly recommend Leasa and Winston Solicitors, in general, for conveyancing and property-related matters.

Anonymous

Vesselin

After researching solicitors & receiving a few recommendations we decided to go with Winston Solicitors, we used them to buy our first home & Michelle did a great job keeping us informed throughout the process, pushing for adjustments to deeds & helping with queries. We managed to complete on our property in 10 weeks from offer accepted thanks in large part to Michelle’s work. 5/5

Anonymous

Wow is all I can say about Joe Rawnsley what a top service he has provided. In a stressful time in life for me he has been professional and completely on the ball. Responding so quickly to me. Absolutely fantastic service. I will be recommending Winston’s to all and definitely use again if needed. Thanks Joe what a legend

Sarah