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

Samantha made my house buying process smooth and completely stress-free. As a first time buyer, I truly can’t thank her enough! She was incredibly thorough, explained everything clearly, and always responded promptly to any questions I had. I highly recommend her to anyone. Thank you Samantha!

Ms R

Working with Leasa and Julie at Winston’s was excellent. Each step was explained clearly and concisely and communication was prompt. I will be highly recommending

Ishmail

Great communication and kept in touch regularly

Mohammed

Samantha and her team have been outstanding during my house purchase. I couldn't be happier. I always received a reply to my emails on the day, even within minutes. Excellent service and would highly recommend.

Sonja

Winston solucitors provided excellent service when we were selling our home. They were available to answer any questions we had and kept us informed of a y progess when selling.

Mr &amp; M

A very reliable and efficient service with clear and prompt communication throughout.

Hannah

Samantha and Michelle from Winston Solicitors were excellent. They communicated quickly and made the process fast and straightforward. We were constantly waiting for other lawyers in the chain because they were so ahead compared to everyone else.

Ms Barclay

Outstanding First-Time Buyer Support!We recently used Winston Solicitors for the purchase of our first home, and we couldn’t be happier with the service. As first-time buyers, the process felt overwhelming at times, but the team at Winston’s guided us through every step with patience, clarity, and professionalism.They were always quick to respond to our questions (no matter how small!), explained the legal and mortgage side of things in a way that made sense, and kept us informed throughout the entire process. Their attention to detail and clear communication gave us complete peace of mind.Thank you so much for helping us secure our first home – we couldn’t have done it without you! We’d highly recommend Winston Solicitors to anyone buying a home, especially first-time buyers like us.

Mr &amp; M