BANK OF MUM AND DAD
BANK OF MUM AND DAD

3 January 2020

Are you thinking of helping your child get onto the property ladder? If you are, you are not alone.

According to are recent report from Just Group, over the last five years, parents and grandparents have helped three in every five first-time buyers purchase their property.

Just Group’s My Home, My Future survey of 4,000 people showed that those relying on family funds has tripled over the past 30 years.

There are many positives to helping your child or grandchild with that key start, but there are risks too if you do not have the right advice.

Any confusion on where the money comes from can delay the conveyancing process and in a worse case-scenario lead to the mortgage offer being retracted.

Many people think that giving their children money should be straight forward, but the Anti-Money Laundering (AML) laws, mortgage restrictions and the legal rights of all parties involved need to be addressed.

Parents should not think that they can simply agree with their child that the money is a gift. This is because your child will be asked for proof of funds by their lawyer.

They will require a letter from you confirming that the money you are providing is a gifted deposit and that you will have no rights over the property. Normally a signed letter to your child should be sufficient, with a copy being passed to their lawyer.

Their lawyer will also need to receive photo identification from you, such as a passport or driving licence. They also need a document showing proof of your address, like a bank statement and utility bill.

Furthermore, they will also need to know where the funds came from. For example, was it from a pension draw, the sale of shares or the sale of a house?

If it is money coming from savings, you will have to provide bank statements showing how the money has been accruing over the last two to six months.

For more details and information call Zoë Baxter, head of the Residential Property team at Phillips Solicitors on 01256 854623 or email [email protected]

 

Disclaimer

This article is current at the date of publication set out above and is for reference purposes only. It does not constitute legal advice and should not be relied on as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.

Have more questions?
Our expert solicitors are here to take the worry off your hands.
Please call us or email and we’ll get back to you as soon as possible.
News
Use it or lose it – making use of your annual allowance
Use it or lose it – making use of your annual allowance

The Annual Allowance With the end of the current tax year fast approaching, anyone wishing to use their 2023/24 (and potentially their 2022/2023) annual allowance in relation to gifts o ...

More
Phillips Law urges people to get writing a Will off their to-do list.
Phillips Law urges people to get writing a Will off their to-do list.

This week (4 – 8 March) is Update your Will Week Phillips Law is encouraging people to consider the risks of not having a Will following new research revealing nearly half of UK adults ...

More
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE

Phillips Law is delighted to have advised Mactaggart Family & Partners and Longstock Capital Limited on a multi-million-pound agreement for lease with The AA to move their headquart ...

More
Deliveroo worker status judgment: implications for employers
Deliveroo worker status judgment: implications for employers

In our January update we reported on the Supreme Court decision in the long running dispute between Deliveroo and the unions representing many of its riders. You can read the full Judgm ...

More
New right to unpaid leave for carers
New right to unpaid leave for carers

From 6 April 2024 carers will have a day one right to request one week’s unpaid carer’s leave per year. Draft regulations for the Carer’s Leave Act 2023 provide the detail on this new r ...

More
Employment Update – January 2024
Employment Update – January 2024

Welcome to the new year! As we embark on 2024, it’s crucial to stay informed about the latest developments in employment law. Here’s a snapshot of key updates and changes th ...

More