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

Amazing and Seamless service!Very precise!

Ramendra

Samantha has been brilliant from start to finish. She has kept me updated throughout, and made the process as hassle free as possible for me as a first time buyer.

Jack

Excellent conveyancing service from start to finish. Amr Elshorbagy at Winston Solicitors handled both our sale and purchase with professionalism, efficiency, and clear communication throughout. As overseas clients, we particularly appreciated how well Amr managed communication across time zones—keeping us fully informed, responding promptly, and explaining everything clearly at every stage. He made what can be a stressful process feel straightforward and well controlled. We felt fully supported throughout and would highly recommend Amr to anyone buying or selling a property.

Stacey a

A 5 Star review as from start to finish the team handling the sale of our house have been absolutely fanastic, nothing has been too much trouble, for someone like me that suffers with short term memory and aniexty problem it has been a relief knowing I can pick up the phone and ask questions and not feel embarrassed doing so.Many thanx for all you have done and we will definately be recommending you if anyone asks.

Julian

We have bought & sold a house with Winston solicitors now and they have been amazing both times! Super helpful & speedy with everything they do, keeping us in the loop at all times! 100% recommend, thank you so much for all your help :)

Charlie

Everything was perfect - great helpful staff-Joe is a star and very patient.

Anonymous, West Yorkshire

Thank you so much to Samantha and the team for all their help towards my property purchase, especially dealing with challenges.

Anonymous, West Yorkshire

With Winston Solicitors, and Sidraa specifically, we felt that we were in safe hands throughout the entire process of buying our first home. Whenever something cropped up which was stressful or unexpected, Sidraa was amazing and made it as smooth as possible. As first time buyers we didn't know a great deal about the process, but felt confident that Sidraa had our best interests at the forefront of the transaction, ensuring that we didn't proceed further with anything until she was absolutely satisfied with all enquiries and documents which we would never have known to ask for. I would recommend to anyone and everyone.

Amy a