The Bank of Mum and Dad

Published: 23/07/2020

Written by Curwens Solicitors

Following the Government announcement that Stamp Duty rates will be reduced significantly until March 2021, there has been a huge influx of mortgage applications and conveyancing instructions. For first time buyers however, it may not be as straight forward, and many potential buyers are having to rely on loans or gifts from family members to purchase their first home.

First time buyers often struggle to save the average 10% deposit required by most mortgage lenders to purchase a property. Mum and Dad are likely to want to assist their children in providing a helping hand in taking that first step onto the property ladder. However, if parents are lending a helping hand, they will usually want to ensure their contribution cannot be claimed by any other person, usually a co-owner of the property.

How, therefore can parents provide assistance, but also protect their contribution and their child’s interests from any future disputes between co-owners and in the event the property is sold?

A Declaration of Trust is an agreement between two or more persons relating to a property, which regulates the way the beneficial interest to that property is owned and details how any sale proceeds are split in the event of a sale. In the example of parents contributing a sum of money by way of a gift, that contribution can be protected within a Declaration of Trust. Or if the parents are providing the sum as a loan rather than as a gift, a Legal Charge or Secured Loan Agreement may be more suitable.

It is advisable for any unmarried parties purchasing property to seek legal advice as to whether a Declaration of Trust is suitable, especially in the event the parties are contributing different amounts to the purchasing price or any family members or third parties are making additional contributions.

Contact Us

Here at Curwens LLP, we can offer expert advice on co-ownership for both married and unmarried couples purchasing or transferring property. Contact our property department today on 020 8363 4444 .

Please note that our briefings are for informational purposes only, and do not constitute legal advice.

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Katie from North London

Kaajal at Curwens was terrific - really friendly and unintimidating, patient in explaining the legal-speak of the severance agreement I was being asked to sign, while also being extremely efficient in processing it all! I would unreservedly recommend Kaajal and Curwens to anybody looking for friendly and painless help with any potentially daunting legal process.

Mike from Palmers Green

We had a very good experience on our house sale with Maryam and Christina. They were knowledgeable, courteous and understanding throughout. I would definitely recommend them and have no hesitation using Curwens again for any legal representation!!

The Thompsons from Finchley

I would highly recommend Curwens. They handled the probate on my late father’s estate in a highly professional manner and explained the whole process clearly. The staff are friendly and kind and dealt with any issues I had promptly. Thank you. Much appreciated.

John from Harlow

I would like to thank the Employment team, and especially Kaajal for assisting me during my redundancy. She remained calm, when I was upset and shocked. The whole process was dealt with within one week, meaning I could go on to find further employment.

Pritti from Surrey

Our purchase was sabotaged by XXXXXXXXXX, and our mortgage offer had expired. Luckily, our lender gave us a one week extension of the mortgage offer. Curwens took over, and magic happened. We completed the purchase on time. Best Service ever!

William from London

I would like to thank you Amanda for all your support during this process. I felt very pleased you were my solicitor, you gave me confidence and reassurance, I felt in very safe hands.

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testimonials

Katie from North London

Mike from Palmers Green

The Thompsons from Finchley

John from Harlow

Pritti from Surrey

William from London

I would like to thank you Amanda for all your support during this process. I felt very pleased you were my solicitor, you gave me confidence and reassurance, I felt in very safe hands.

Anonymous

HR Director, Milbridge Group PLC

I just wanted to say thank you for all of your help with getting our office lease done. Bradley, Sandra and Sarah were so responsive and it was a pleasure working with you.

Clinton Gomer, Energy House Digital

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