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

I had a lot of trouble with purchasing a house due to external reasons. Through the entire timeline Olivia was always keeping me updated, and responded fast to emails, something you don't get very often from solicitors! She did her best to meet deadlines and I genuinely felt they cared about the sale for me

Reece

We had a great experience with Leasa, who acted for us during our property purchase. She was quick, efficient, professional, and kept everything moving smoothly. We really appreciated her support throughout the process and would highly recommend her services.

Benjamin

Second time using Olivia at Winston Solicitors and once again she delivered. Impeccable service and completed my remortgage within the desired timeframe. Efficient, straightforward and simple.

Rowena

We are first time buyers and were new to the process of buying a house but our solicitor, Leasa, explained everything clearly to us and was the best solicitor we could wish for in this situation: She was super efficient, thorough, and we had great communication throughout, which was extremely useful. Things got done fast and to a high standard, and Leasa was able to spot things the seller's solicitor wasn't. Everything was super quick and within the timeline we set, so we can highly recommend this firm and have done so to friends who are also buying a house, five stars!

Anonymous

Conveyancing process only took a couple of months, always informed, never had to chase anything up.

Joe

Excellent job by Michelle with my conveyancing. Clear communication. Rapid responses. Everything you could want.

Graham

Michelle was our conveyancer for our recent house purchase. Her professionalism, thoroughness and quick responses throughout the process made the purchase as easy as possible for us - we are very grateful to her and the rest of the team at Winston Solicitors for their work.

Anonymous

had a great experience with winston solicitor company. The team was professional, friendly, and helpful throughout the whole process. Joe Rawnsley was fantastic. He kept me informed, answered all my questions, and made everything straightforward and stress-free. I’m very happy with the service I received and would highly recommend them to anyone looking for a reliable and trustworthy solicitor.

Bijan