Gifted a deposit? How to protect it

Have you gifted, or are you about to gift a sum of money to your offspring for a deposit on their first (or subsequent) residential or BTL property?  

 

I'm guessing that a thought might go through your mind of "What happens if their relationship breaks up" "What will happen to the gift that I have given?" ....... Chances are that the departing party could walk away with half of it. 

 

Until recently, lenders have asked you to sign a letter confirming that the money is a pure gift, and you have no recourse to reclaim the funds via a loan or by taking a charge over the property.  

 

Really loaded against you. 

 

There are a couple of lenders now who are addressing these issues, by allowing you to specify that a gift should be repaid.  

 

One case I had recently a parent was gifting £140,000.  

 

In order to protect their daughter, a stipulation was inserted in the lenders form that the loan was repayable on the sale of the property. 

 

No monthly payments were specified, so it did not harm her affordability. Should the daughter split from her relationship with a partner living in the property who wanted to take some of the equity, the loan would be repayable. A bit of a Trojan Horse situation really, but it gave my Client peace of mind. 

 

Are you in this situation now?  

 

Would you like to discuss this further.  

 

We know the lenders who will allow this scenario.  

 

Give me, John Constant, a call on 07751 042485 or email me john@hdconsultants.net .