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 couldn’t recommend Samantha Robertson-Strong enough. She made the whole process of buying our first property so much easier and would recommend her to people I know.Thanks Again Samantha and the Winstons team!

Mr Atherton

Joe and Amr were good at keeping contact and answering my questions as a first time buyer. The solicitor on the other side of the purchase was not always responsive, though Joe/Amr made sure to keep chasing which I appreciated. Overall smooth process and would recommend.

Amber

Absolutely incredible! Exceeded all expectations, very professional.

Michael

It is probably 45+ years since I last bought a house so it was a real re-learning process. Michelle was helpful and pateint throughout. She kept me fully informed of the prgress being made and all the responses from her enquiries to the other party were detailed. Both sides were under pressure to complete before April when further tax increases loomed. It was also the pressure that I would be heading to France to oversee the sale of my property. The only 'blip' that I saw was the query of my funding. It was simply the transfer of the funds from the sale of my home in France to cover the sale in Leeds. This was accepted. I had requested Sterling and not Euros and perhaps that did raise an eyebrow or two. I would have no rpblem in recommending Winstons.

Roger

Outstanding from start to finish. Leasa was fabulous, professional and thorough throughout. Would highly recommend to anyone. We honestly cannot Thankyou enough for getting us into our family home.

Natalie

Amazing service from Sidraa with support from Tom. Timely communication, easy to deal with and thorough. Sidraa went over and above to meet our deadlines and was so personable to deal with. Would 100% recommend.

Sophie

Both Samantha and Michelle at Winstons Solicitors have been brilliant keeping us informed with the selling and buying of our houses. If there were any problems they explained what was happening and also put our minds at rest.... as moving is stressful enough.will definitley use again in the future as we were impressed with the company and service.

Craig

Leasa was very helpful throughout our (very) protracted sale. She kept us updated and was always ready with advice on our rather unusual situation (we were selling our rental house to our tenant). Definitely recommended

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