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

Winston Solicitors provided a conveyancing service to me. I found them very friendly and couteous, and their service was always professional and efficient. I was kept informed throughout, and any queries were dealt with promptly. I would not hesitate to recommend them to others.

Michael

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Review for Samanthan Robertson-Strong:Samantha (and Winstons Solicitors) were amazing! As first-time buyers we couldn't have asked for someone better to guide/advise/drive the process of helping buying our home. Samantha was always available to answer queries (both ours and the sellers) and did so effectively and efficiently. We had heard horror stories from friends and family regarding other solicitors times for response, quality of work, friendliness etc.. However, we found none of that with Winstons and moreso Samantha; they were fantastic from start to finish and made us feel as though no query was too menial. We also found the Online Portal tracker incredibly useful, as this allowed my partner and I to undertstand the process in more detail and prepare for what documents were required and when these would be due.

Mr Hunt

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Simon

Excellent service from start to finish in selling my property.Would highly recommend Winston Solicitors.

Carol

Sidraa is always professional, understanding, always keeps you updated and has helped me soo much through a difficult property sale. I wouldn’t hesitate in using Sidraa at Winston’s in the future.

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After Leasa did such a great job on the sale of my last property, when buying again I didn't hesitate to use Winston Solicitors. I had the same experience as before - timely communication and updates, professional service and overall we are very satisfied.

Rosie

Winston solicitors provided an exceptionally professional and thorough service. My conveyance manager, Leasa, guided me throughout the entire process with a friendly and considerate approach. I am exceptionally grateful for her patience and kindness.

Evan