Getting family help onto the ladder
In this guide
Ways your family can help
You might have family members willing to help you buy your first home.
Financial support from your family could help you achieve your goals faster. But it’s important you all go into it with a shared understanding.
Everyone involved may want to get independent legal or financial advice. This can help make sure you’re all fully informed and protected.
Your family can help you onto the ladder in a few different ways.
Gifting money towards your deposit
A family member can gift you a lump sum of cash towards your deposit. Everyone should understand that you won’t be repaying the money, and they’ll have no legal rights over your property.
What to do:
-
Have proof of the money
our solicitor and lender will want to see some proof of where the gifted cash has come from; a bank statement will usually do the trick.
-
Get advice
it’s not nice to think about, but you may have to pay inheritance tax if the person giving you the money dies within seven years of gifting you the cash. It’s worth getting independent financial advice to be clear on whether you’d be liable for inheritance tax should the worst happen.
Lending money towards your deposit
A family member can loan you the money, instead of gifting it to you. If the money is a loan rather than a gift, your family member is expecting to be paid back. A formal loan agreement can cover the details of a repayment plan and any interest you might need to pay on the amount they lend you.
What to do:
-
Have proof of the loan
your lender will want to see your loan agreement and you should bear in mind that some lenders might refuse a borrowed deposit.
-
Get advice
a loan agreement is a legal document, so you’ll need a legal professional to do this work for you. Talking to a mortgage adviser could also be helpful to get an understanding of which lenders are likely to accept a borrowed deposit.
- Saving your deposit
Need a helping hand?
Getting on the property ladder sometimes requires a little help. We have some ways you can get extra support.