Residential Property Partner, Sarah Sargent, from Lupton Fawcett LLP, answers questions on Parental Gifts

Q. My partner and I are buying our first property together, my parents are gifting £30,000 towards the deposit. Are there any issues?

A. Over the past few years it has become increasingly common for parents to provide financial support to children when purchasing a property, but there are a number of issues which you need to consider:-

  1. Is this truly a gift?

You must be clear on the circumstances.  If it is a true “gift” then your parents must be willing to hand over the money without any claim on the property or on the money provided.  If they do wish to retain any claim on the monies then they would need to consider a loan agreement but you must be aware that this would need to be disclosed to your lender and you should therefore discuss this carefully with your mortgage advisor

  1. What will lender require?

Every lender has a different set of requirements and you may find that you need to provide information to both your broker and solicitor.  This may feel repetitive but it is the process which needs to be followed.  In general, your lender will need to see a declaration signed by the person making the gift that it is a true gift and they will also require a bankruptcy search to be carried out against your parents (your solicitor will carry this out for you)

  1. AML

Current money laundering legislation will usually mean that the solicitor acting on your behalf will want to carry out full checks on your parents.  This will involve carrying out an ID check on your parents as well as asking them to provide full documentary evidence as to the source of the funds.  You should make sure your parents are aware of this and understand that they must be prepared to provide this information

  1. Protecting the deposit

Whilst your parents need to be prepared to have no claim on the monies gifted, it is possible to protect the deposit by way of a Declaration of Trust.  This document will set out how any equity in the property would be split between you and your partner in the event of relationship breakdown.  You should speak with your solicitor about this at the earliest possible opportunity.

Residential Property & Conveyancing Services

Lupton Fawcett is a leading personal and commercial law firm in Yorkshire with well-established teams of Residential Property Solicitors at each of our offices. You can find out more about our Conveyancing teams in West Yorkshire, North Yorkshire and South Yorkshire here:

Leeds Conveyancing

York Conveyancing

Sheffield Conveyancing

For further help or advice on the contents of this article or Residential Property generally, please contact Residential Property Partner, Sarah Sargent, on 0114 228 3281 or

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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