Buying a property with a gifted deposit - how does the conveyancing process work?

Many first-time buyers take their first steps onto the property ladder with financial support from their family. If you’re planning to buy your first home using a gifted deposit this guide explains what additional information your conveyancer will need to know and how the legal process works. This guide covers properties purchased in England and Wales.

For a more general overview our guide 'Buying a property  - how does the conveyancing process work?' explains the legal steps involved in buying a property.

Lisa Parker
November 8, 2023

Information your conveyancer will need

Once your offer on a property has been accepted, you should let your conveyancer know straight away that some or all of your deposit has been gifted to you. They’ll need to make various checks to satisfy anti money-laundering rules.

If you leave it until later in the conveyancing process to tell your solicitor your deposit is being gifted, this could hold things up as they’ll need to have prepared all the relevant paperwork regarding the gift before contracts can be exchanged. For example, your conveyancer will require written evidence that your deposit has been given to you, and that it’s not a loan you’ll need to repay.

The person or people who have gifted you the funds must provide what’s known as a ‘gifted deposit declaration’. This has to be written in a specific way so that it makes it clear they’re giving the money as a present and that they won’t have any legal claim on the property you’re buying, or on the money they’ve given you.

The person giving the gift will also need to provide proof of their identity, such as a passport or photocard driving licence, and a bank statement. These should show how the gifted money was earned, from savings, or whether it was inherited.

Once your conveyancer has all the information they need, they’ll let your mortgage lender know your deposit is being gifted and isn’t a loan. This is important as it proves to them that you won’t have extra financial commitments on top of the outgoings you’ll already have told them about during the mortgage application process.

Will having a gifted deposit make the conveyancing process longer?

As long as the person making the gift provides the information required and supplies their proof of identity quickly, having a gifted deposit shouldn’t slow down the conveyancing process.

However, because the conveyancer needs to make additional checks, such as getting official confirmation that the money you’ve received is a gift, there will usually be a small extra charge. Conveyancers will charge in the region of £150 charge plus VAT for a gifted deposit. Charges may be higher if there are multiple gifts involved.

Other checks

Remember that your conveyancer has to conduct several other searches during the conveyancing process, whether you have a gifted deposit or not. These include Land Registry searches, local authority searches, environmental searches and water authority searches. This is so they can find out whether there are any significant issues with the property you’re buying or if there are major plans, such as big developments, which could affect your property’s value. Learn more about searches in our guide 'What are solicitors’ searches when buying a house?'

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