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

Very best service as First time buyer they explained and Sort out everything clearly for me.

Nosheen

Samantha was great. Very efficient. Always able to help. Very straightforward transaction. I would recommend.

Mr &amp; M

Absolutely amazing. Was my first time buying a house and I had no idea what I was doing. Samantha was the best solicitor I swear she never leaves her desk, each email I sent was responded to within 5-10minutes. She made a very stressful process a lot easier and can't thank her enough. When she had days off work the rest of the team there took on her work just as well, super easy to contact them all and they explained everything super clearly for me to understand. Anytime I need a solicitor from now on I will be using Winstons.

Mr Harwood

I've used a number of conveyoncers over the years but Leasa was by far the best. Attentive when required and able to mediate issues to ensure a smooth purchase. I've found with previous property purchases conveyancing correspondence can sometimes go unasnwered, however Leasa was prompt and proactive with any queries made both by telephone and email. She made the whole process extremely easy so I'd be happy to recommend Winstons as a professional firm and look forward to doing future business with them.

Stephanie

Leasa came recommended by a friend and we are extremely pleased with the service she and Winston Solicitors provided. We found Leasa to be very quick and she provided regular updates throughout, making the process particularly smooth. We will definitely appoint Leasa again when we next move.

Tom

Excellent communication throughout the whole process.

David

I appointed Winston’s as conveyancers for both the sale of my existing home, and purchase of my next one. Sidraa and Tom were fantastic, working with pace and always responsive by email and/or when I called. It was far more seamless than I anticipated and I was incredibly impressed with their efficiency and communication. Thank you!

Joseph

Excellent professional service would highly recommend

Anonymous