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Hunters Law
1st February 2024

Help from the bank of mum and dad?

Cordelia Smith
Cordelia Smith

The housing market is looking more optimistic in the face of lower interest rates, and that increase in confidence is particularly marked for anyone who's buying with a mortgage.  

It's striking, however, how many first-time buyers still need financial help from family in order to fund their deposit. 

Perfectly naturally, parents, grandparents and sometimes siblings want to help the next generation to get their feet on the housing ladder, whether with a gift or a loan.  

Plenty of buyers who are lucky enough to receive such help will still need to get a mortgage to buy their new home. Irrespective of whether the family money is given or loaned, it's crucial to take proper advice about the consequences of that. Most high street lenders will have very stringent requirements about gifts and family loans. 

It's often essential that family financial input is disclosed to the lender at the outset; otherwise, you risk breaching the terms of your mortgage offer.

As ever, if you're thinking about buying a flat or a house, it pays dividends to instruct your property solicitor well in advance of putting in an offer on your dream home.