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 have been so impressed by Leasa and the whole team. They are super responsive and great to deal with. They have implemented some really great software that enables their customers to stay informed of the process, without losing the personal touch. We went from offer to completion in about a month (even with the Christmas break factored in). They have a client for life :)

Craig

Used Winstons for the conveyancing of my first property. Leasa, Julie and everyone there were very friendly and helpful throughout keeping me updated and chasing with the sellers solicitors. Excellent firm, I would definitely use them again.

Barnabus

I have used Winston Solicitors a couple of times now during a purchase and Sale of a property. Most recently i have used them for the sale and my main contact was Joe Bright. Joe kept me updated through every part of the process and made the selling of the property less stress than it would have been. I would like to thank Joe and the team for their hard work and support in ensuring the property sale when through as efficiently as possible.

Jhangir

We had an excellent experience throughout the entire process. The team was extremely helpful, informative, and kept us updated at every stage. They were very knowledgeable, particularly regarding our funds coming from Romania, and they were thoroughly involved in all the required checks, which gave us great confidence. Communication was clear, timely, and professional, and we always felt well supported. We are very grateful for their dedication and would not hesitate to recommend their services to others.

Aurora

We have just used Winston Solicitors for any sale which went very well but the purchase had a few problems and took longer than expected but with the help of Sam and her team we finally got there. Sam was very good any problems we had were dealt with correctly and straight away acted on which was good professional work always. We would definitely use them again and recommend them.

Michael

I recently used Winston Solicitors for the puchace of a new house and I don't have anything other than positive things to say obout the service. Olivia was always availble when I needed to get in touch for updates, either by phone or email. The level of customer service really shone through and that's what I would say made the difference. I'd have no hesitation in recommending them to anyone who is looking for a conveyencing solicitor.

Matt

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Habtom

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Adnaan