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

Despite a protected sale, Sidraa & Tom were the consummate professionals and kept everything on track

Kate

Very quick response time and very helpful answering all our questions. Will definitely be using Winston Solicitors again!

Yasmine

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Hannah

We used Winston's (Samantha) for our house sale & purchase. Very impressed with her dealings with us, keeping us up to date with progress and always happy to answer any questions we had. Nothing was too much trouble for her. Colleagues who asisted her, were equally helpful. Would have no hesitation in using them again or recommend the firm. First class service.

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Robert

Sidraa was really.helpful through the whole process of buying our house

Ben

We used Winston Solicitors for our first home purchase based on a friend’s recommendation, and we couldn’t be happier. Samantha Robertson-Strong was exceptional throughout the entire process. She was professional, efficient, proactive, and more responsive than we ever expected. She explained everything clearly and answered all our first-time buyer worries with patience and reassurance. We couldn’t recommend Samantha enough. Thank you again for all your help.

Miss Bartoli

Can not recommend enough. I have used Samantha Robertson Strong for both the purchase and sale of my old house and she was amazing from start to finish. She always went above and beyond and always dealt with things in a speedy and efficient manor whilst always explaining exactly what was happening. Thanks for everything Sam.

David