Buying a Property with a Gifted Deposit

Buying a property with a gifted deposit can make homeownership more achievable. However, using money gifted by someone else to fund your purchase involves additional legal checks and mortgage lender requirements that must be satisfied before the transaction can proceed.

If these requirements are not identified and dealt with at an early stage, they can cause unnecessary delays to exchange of contracts or completion.

At Clifford Johnston & Co., our experienced Residential Property Solicitors regularly assist clients buying homes with gifted deposits. We understand that purchasing a property is a significant financial commitment and that you need clear advice, reliable communication and a solicitor who will keep your transaction progressing.

With over 30 years of experience providing property and conveyancing services, our team has the knowledge and technical expertise to deal with the additional requirements associated with gifted deposits. Our Conveyancing Department is accredited under the Law Society’s Conveyancing Quality Scheme (CQS), reflecting our commitment to high standards of residential conveyancing and client service.

From our offices in Manchester and Stockport, we help first-time buyers, home movers and families purchasing property across England and Wales.

If you are buying a house with a gifted deposit, call us using the number at the top of this page or complete our enquiry form to speak with one of our Property Solicitors.

How Can We Help?

Buying a property with a gifted deposit involves additional legal checks that must be completed before your purchase can proceed.

Our solicitors will establish your mortgage lender’s requirements, verify the source of the gifted funds and ensure the necessary declarations are correctly completed.

We understand that family members providing financial assistance may be unfamiliar with the conveyancing process. We explain what information is required from them and why, helping to avoid confusion and unnecessary delays.

Where a purchase involves gifts from overseas or more complicated financial arrangements, we identify potential issues early and advise on the steps needed to address them.

At Clifford Johnston & Co, we provide clear advice and a personal service throughout your purchase. We work proactively to satisfy the relevant requirements and keep your transaction progressing.

Can You Get a Mortgage with a Gifted Deposit?

Yes. Many mortgage lenders accept gifted deposits, particularly when the money comes from a close family member. However, each lender has its own requirements, so it is important to confirm that your proposed gift will be accepted.

Lenders will generally want reassurance that the money is a genuine gift rather than a loan. The person providing the deposit must not expect repayment or acquire an ownership interest in the property.

Who provides the money can also affect your mortgage application. While gifts from parents and grandparents are commonly accepted, some lenders impose restrictions on contributions from friends or more distant relatives.

Additional requirements may apply where the donor intends to live at the property or the money is coming from overseas.

Our solicitors can establish your lender’s requirements and advise on any issues that need to be resolved before your purchase proceeds.

What Documents Are Needed for a Gifted Deposit?

When buying a property with a gifted deposit, your solicitor will need certain documents from the person providing the money. The exact requirements will depend on your mortgage lender and the circumstances of the gift.

Gifted Deposit Letter or Declaration

A gifted deposit letter is a signed statement confirming that the money is a genuine gift and not a loan.

It will usually identify the donor, confirm their relationship to the buyer and state the amount being gifted. The donor will also normally need to confirm that they do not expect repayment and will not acquire an ownership interest in the property.

Some mortgage lenders require their own gifted deposit declaration to be completed. Others will accept a suitably drafted letter.

If there is any expectation that the money will be repaid, this must be disclosed rather than described as an unconditional gift.

Proof of Identity

Your solicitor will need to verify the identity of the person providing the deposit as part of the checks associated with the transaction.

This will usually involve photographic identification, such as a passport or driving licence. Evidence of the donor’s residential address may also be required.

Evidence of the Source of Funds

Your solicitor must establish where the gifted money has come from to satisfy relevant anti-money laundering requirements.

A bank statement showing the available balance may not be sufficient. Additional evidence may be needed to explain how the donor obtained the money.

For example, if the gift comes from the sale of another property, your solicitor may request documentation confirming the sale and receipt of the proceeds.

The evidence required will depend on the origin of the funds and the circumstances of the transaction.

Why Do Solicitors Need to Check a Gifted Deposit?

Solicitors have legal obligations under anti-money laundering legislation to establish that money used to purchase property comes from a legitimate source. These checks also apply when a family member or another third party provides a gifted deposit.

Where a mortgage is involved, your solicitor must also satisfy the lender’s requirements. Any arrangement involving repayment or a financial interest in the property must be disclosed, as it could affect the lender’s decision to provide finance.

If the required checks cannot be completed, your purchase may be delayed or unable to proceed.

Our solicitors identify potential concerns early and explain what is needed to satisfy the relevant legal and mortgage requirements, helping to keep your purchase on track.

Why Choose Clifford Johnston & Co.?

When buying a property with a gifted deposit, you need solicitors who understand the additional legal requirements and can manage them efficiently without unnecessarily delaying your purchase.

At Clifford Johnston & Co, we have over 35 years of experience providing expert legal advice and a professional, proactive and personal conveyancing service. When you instruct us, you can expect:

• Experienced Solicitors with extensive knowledge of gifted deposit property purchases.
• Proactive Legal Advice to identify and resolve potential issues early.
• Clear Communication to keep you informed throughout your purchase.
• Support for Gifted Deposit Donors to help family members understand what is required.
• Transparent Pricing with clear information about our fees and associated costs.

We understand how important your property purchase is. Our solicitors work hard to protect your interests and ensure your transaction progresses as smoothly as possible.