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 from Winston Solicitors has been fab! Nothing was too much trouble and she was very quick to respond to any queries I had. She made the whole process of buying my first home enjoyable, smooth and straightforward! I would definitely recommend her services!

Anonymous

I would recommend Winston’s to any first time buyers out there that need support on the conveyancing process. Samantha and the team were attentive, communicated clearly, regularly and their checks were thorough. The whole process was smooth and I was updated regularly. A huge thank you to Samantha for guiding me throughout the whole process!

Hao

Samantha and Joe were really supportive and helpful throughout a not so easy transaction.

Emily

We used Winston Solicitors to change our wills so that we limited the amount of money could be claimed by care homes should we need to use them for our care.Emily did an excellent job for us and we would definitely recommend Winston Solicitors.

Mr &amp; M

Pro-active & efficient legal firms are hard to come by these days. I'm happy to say, that Winston Solicitors has met most of my expectations, especially through Sidraa & Paulo. Their attention to details, ensuring that as a client, I am aware & protected throughout the process was gracious & professional of them.

Anonymous

Found the whole procedure straight forward, everything explained very well. Staff overall gave excellent customer service in a professional friendly manner. Kept informed throughout the whole process which was very helpful and reassuring. Fee for work very reasonable. Thank you to everyone involved, all your help and assistance much appreciated.

Ann. S., Morley

Really good experience with Winston solicitors. Frequent contact from our solicitor Olivia and assistant Amanda, answered queries and worked through the process quickly. Really liked the tracker as it broke it down and made the process easier to follow without constantly needing to ask what happens next.

Anonymous

I rarely write reviews, but my experience with Winston Solicitors was so exceptional that I feel compelled to share. From start to finish, they went above and beyond in every possible way.What made them stand out:Clarity & communication – They explained every step in plain English, never made me feel silly for asking questions, and responded to emails/calls faster than I ever expected.Expertise – They spotted issues I wouldn’t have noticed in a million years and navigated complex legal points with complete confidence.Genuine care – This is what truly sets them apart. They treated my case like it was their own, showed real empathy during stressful moments, and fought for the best outcome with total dedication.Thanks to them, everything went more smoothly than I dared hope. If you need a solicitor who combines sharp legal skills with outstanding personal service, look no further. I’m beyond grateful.

Liena