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

Leasa Foster was always on hand to help us every step of the way throughout our sale and purchase. She was professional, efficient and friendly throughout. Nothing was too much trouble to explain to us and she got all transactions over the line swiftly without stress or drama. I was given Leasa’s name by recommendation and I for one will also be recommending her. I wouldn’t hesitate to use Winston Solicitors again. Our thanks extend to the whole team that tied this all together for us!

M O’Callaghan, West Yorkshire

We had an excellent experience throughout the entire process. The team was extremely helpful, informative, and kept us updated at every stage. They were very knowledgeable, and they were thoroughly involved in all the required checks, which gave us great confidence. Communication was clear, timely, and professional, and we always felt well supported. We are very grateful for their dedication and would not hesitate to recommend their services to others.

A O, West Yorkshire

I mainly dealt with Joe Bright during the sale of my property. He was always very helpful and kept me updated throughout the process. Joe made the process of selling our house less stressful than it would have been, so please pass on our thanks to him.

J Gulzar, Liverpool

Sidraa was absolutely amazing during the whole process of us buying our first home from start to finish. She was so organised, never missed any details & always had a warm friendly approach whenever we phoned in. The estate agent, seller and their solicitor all praised how on the ball Sidraa was during the process which speaks volumes. The portal was also very useful to keep a tab on how we were progressing. We wish Sidraa and the team all the very best for the future and we have been recommending Winston Solicitors to all our friends and family. Best wishes, Nushura and Iqbal

Nushura

Thank you, you did my job well.

Irfan

Sidra Razzaq was great throughout the process. Very professional, responsive, and always clear in her explanations. I received a really good service and felt well supported from start to finish. Highly recommend.

Anonymous

We had a really great experience, Michelle was very responsive and helpful throughout. I would definitley recomend to others and will certianly use them again if the need arises.

Maria

Winston’s were well reviewed when I was searching for a solicitors to use for my first house purchase. As a first time buyer I had little knowledge of the process but Michelle at Winston’s was excellent and helped me through every step of the way. I would highly recommend Winston’s to anyone looking for solicitors for a house move!

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