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

Excellent. Engaged, honest and quick throughout. When they said something would be done, it was. Couldn't be happier.

Samuel

I found Sidraa to be very thorough, proactively raising questions about the conveyance even before I had asked her myself. All communication was clear and regular updates provided, which was very helpful.It was a stressful process (what house move isn’t!)due to an issue dragging on, no fault on the Solicitors’ part but meant exchange and completion in quick succession! Ultimately, Sidraa and Tom worked very hard to achieve the completion date everyone wanted so thank you 🙏

Dorothy

Leasa and the team at Winston solicitors have been really good. Leasa was very thorough in her work helping me with my house purchase. I can highly recommend her and Winston solicitors for conveyancing.

Maria

Winston Solicitors are the best solicitor firm I have dealt with. They helped sell my house. Sidraa and Tom were always communicating with me and turned things round quickly when I was going out of the country. I would definitely use them again and that’s not the case usually with solicitor firms.

Rob

Quick working & lovely solicitors. Would definitely recommend :)

Ben

Samantha was always very helpful, I frequently had questions as a first time buyer so would regularly call just to ask what things meant on the various forms and documents I had to sign. I would either get through to Samantha herself or to Paulo so there was always someone available. I would only say that as a first time buyer I was very naive to the process, and only found out I had missed an important step in the mortgage application through a reminder from Winstons asking if I had done it yet. Otherwise a very positive experience overall.

Anonymous

I cannot praise Winston Solicitors highly enough,I would recommend them to anyone buying or selling their property. They were very professional and very supportive at all times. I would like to take this opportunity to thank Sidraa Razaq and Tom Mcllroy for their professionalism and patience at all times.

JANET

Samantha is simply the best!

Derek