Jade Phillips talks about buying and selling residential property...

The residential property team specialises in all aspects of residential conveyancing including sales and purchases of freehold and leasehold properties, remortgages, transfers of equity, shared ownership, new builds, Help to Buy, Right to Buy and Land Registration.

When purchasing a property there are many ways in which funds are obtained to enable you to purchase, for example, Mortgages, Help to Buy Mortgages, Equity Release Mortgages, Help to Buy ISA’s, Savings, Loans, and Gifted Deposits. Gifted deposits are becoming increasingly more popular as parents and grandparents want to assist their grandchildren and children in getting on to the property ladder. The majority of high street lenders accept gifted deposits as long as they come from a family member, and, as part of your mortgage application this information would need to be passed onto the lender prior to the mortgage offer being issued. In any event as Conveyancers we are under an obligation to report gifted deposits to the lenders when instructed to do so by their conditions. To enable us to fulfil their requirements we will arrange to write to our clients family member to request written confirmation from them in respect of the gift as well as a request for identification and proof of funds. As the family members are not our clients we tend to receive a lot of calls about why this sort of information has to be provided and a lot of people feel that providing bank statements as part of the proof of funds requirement is intrusive. We appreciate that this can come across as being intrusive, however ultimately the procedures that are in place are to protect all parties. We are also under an obligation as a firm to act appropriately under the Money Laundering Rules and Regulations therefore unfortunately this information must be provided to enable the transaction to proceed. Purchasing a property is probably the biggest financial commitment that you will ever undertake therefore the conveyancing procedures that are in place have evolved over time to deal with today’s requirements.

Another point to think about when receiving a gifted deposit is how this is protected, if at all. For example, if an unmarried couple purchase a property together however only one of the purchasers’ parents are gifting a sum of money, you may want to think about protecting this sum for one of the purchasers in the event of a separation or death. A Declaration of Trust could be entered into to show the purchasers intentions when they purchased the property. There are several ways in which the purchasers can hold the property to protect their individual interests.

The above is obviously a rough guide and does not cover all scenarios, for further information please contact Jade Phillips on 01743 285888.

 

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