Over 64,000 property purchases over the last year involved the buyer relying on a gift of cash for all or part of the deposit.
An analysis by conveyancing firm myhomemove says most cases were the stereotypical first time buyers relying on cash gifts from parents.
In the 12 months to the end of June this year some 5.36 per cent of home completions involved gifted deposits. This has risen from 4.35 per cent early in 2014.
However, the firm warns that to conform with anti-money laundering rules, buyers and the ‘givers’ must provide a paper trail to show where the money comes from – this could be a single bank statement or detailed evidence of how the money was accrued.
Some mortgage companies will also require signed agreement by the giver that the donation in question is indeed a gift and not a loan which could prejudice the scale of borrowing the prospective buyer would be allowed.
“Being prepared at an early stage in the conveyancing process could ensure unnecessary delays are avoided. If it emerges late in a purchase that some of the deposit is a gift, it can be very difficult to pull the necessary paperwork together quickly – particularly if the person making the gift is unavailable because they are on holiday, for example” says a company spokesman.
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