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

We bought our first house and we chose Winston Solicitors based on our friend's recommendation. We are very happy with the service that they provided during the entire process. Leasa and Julie are very knowledgable and extremely prompt in answering our questions. They informed us in a very clear way in each step. We definetely recommend them.

Pinar

Cannot thank the Samantha and Michelle enough for their service. This is our second time using Winston’s to buy a property and we would not go anywhere else. Samantha is professsional, efficient and nothing is ever any trouble. They kept us informed throughout the whole process. Would not hesitate in recommending them to our friends and family.

Stacie

We have used Winston’s for 2 purchases now; Samantha and Michelle outstanding on both, always kept us up to date, and nothing was too much hassle. Others cannot come close, super efficient, and would definitely recommend.Chris and Stacie

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Sidraa and Tom were absolutely fantastic. Sidraa was efficient, fast as replying and detailed. most importantly however, she was kind and showed great empathy in what is a very stressful time during someone’s life. Winston’s are very lucky to have such a fr was solicitor.

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Leasa dealt with my sale and purchase. She's been super responsive and helpful. The daunting selling and buying on a long chain in the end went smoothly thanks to Leasa! Highly recommend!

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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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