Do you have to declare a gifted property deposit?

Many prospective buyers state that one of the hardest parts of the property purchasing process is saving enough money for a deposit.
This comes as no surprise. As this Money article explains, the average deposit paid by first-time buyers in 2023 was more than £60,000.

For many prospective buyers, it simply isn’t feasible to save tens of thousands of pounds to experience the security of owning their own home. This is why increasing numbers of aspiring homeowners are benefitting from gifted deposits to boost their savings and take that all-important first step onto the property ladder.

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What is a gifted deposit?

A gifted deposit refers to any money a homebuyer receives to help them purchase a property, with most financial gifts coming from parents or other close family members.

As the name implies, gifted deposits are given as gifts with no expectations for the money to be repaid. The person giving the money does not have any legal interest in or rights to the property. As such, you may not need to obtain a deed of trust; however, it is important to seek comprehensive legal advice for peace of mind.

Who do you need to tell about a gifted deposit?

It is important to declare gifted deposits to your prospective lender as part of the mortgage approval process. Additionally, if you are working with a mortgage broker, you must inform them and your conveyancing solicitor.

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Will a deed of trust be required?

You may not need to set up a deed or declaration of trust; however, your lender may ask you to provide a gift deposit declaration that details the name of the person receiving the gift, where the funds are coming from, and the amount of money being gifted.

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