What is a gifted deposit and what proof is needed?
Buying your first home is exciting, but saving up for a deposit can feel like one of the biggest challenges. For many first-time buyers, help from family members can make all the difference.
This is where a gifted deposit often comes in.
A gifted deposit is very common in UK property purchases, but it does come with some important legal and mortgage requirements. Mortgage lenders and conveyancing solicitors will usually need proof of where the money has come from, and you must declare the gift properly to avoid delays.
In this guide, we explain what a gifted deposit is, what proof is needed, and how a conveyancing solicitor can help keep your purchase moving smoothly.
What is a gifted deposit?
A gifted deposit is money given to a home buyer (usually by a family member) to help fund the deposit needed to purchase a property.
The key point is that the money is a gift, not a loan. This means the person giving the money does not expect to be repaid and will not have any ownership rights in the property.
Example of a gifted deposit
A typical example might be:
- You are buying your first home for £250,000
- You need a 10% deposit (£25,000)
- Your parents gift you £15,000 to help you reach that amount
That contribution would be treated as a gifted deposit.
Gifted deposits are especially common for first-time buyers who may struggle to save while also paying rent and living costs.
Is a gifted deposit allowed when buying a house in the UK?
Yes, a gifted deposit is completely legal in the UK, and mortgage lenders regularly accept them.
However, it must be properly declared as part of the conveyancing and mortgage process.
Mortgage lenders need to ensure that:
- The deposit is not actually a loan
- The gift will not create financial pressure on the buyer
- The funds come from a legitimate source
Your conveyancing solicitor is also required by law to carry out checks under UK anti-money laundering regulations.
So while gifted deposits are allowed, they must be handled correctly.
Why do mortgage lenders and solicitors ask for proof of a gifted deposit?
Many first-time buyers are surprised by how much paperwork is involved when using a gifted deposit.
This is mainly due to two reasons:
Mortgage lender requirements
Your lender needs to confirm that the deposit is genuinely a gift and not a loan.
If the deposit were repayable, it could affect your ability to afford mortgage repayments and may change the lender’s decision.
Anti-money laundering checks
Conveyancing solicitors must comply with strict UK anti-money laundering laws. This means we must verify:
- Who is providing the funds
- Where the money originally came from
- That the funds are not linked to criminal activity
These checks protect both buyers and the wider property market.
What proof is needed for a gifted deposit?
If you are using a gifted deposit, you should be prepared to provide certain documents early in the process.
Most mortgage lenders and conveyancing solicitors will ask for:
- A signed gifted deposit letter
- Bank statements showing the funds
- Proof of ID for the person gifting the money
- Evidence of the source of funds
- Confirmation that the gift is not repayable
- Any lender-specific gifted deposit forms
Providing these documents early can help prevent delays later on.
What is a gifted deposit letter?
A gifted deposit letter is a written document confirming that the deposit contribution is a genuine gift.
This letter is usually required by both the mortgage lender and your conveyancing solicitor.
What should a gifted deposit letter include?
A proper gifted deposit letter should confirm:
- The amount being gifted
- The name of the person providing the gift
- Their relationship to the buyer (e.g. parent, grandparent)
- That the money is a gift and not a loan
- That no repayment is expected
- That the giver will have no legal interest in the property
Your solicitor can help ensure the letter meets lender requirements.
Can a gifted deposit be repayable?
No, a gifted deposit must not be repayable.
If the money is expected to be paid back, it is no longer considered a gift. It becomes a loan, which could:
- Affect your mortgage affordability
- Require additional legal documentation
- Lead to the lender refusing the mortgage offer
It is always best to be honest and transparent with your solicitor and lender from the beginning.
Gifted deposits from overseas family members
It is possible for a gifted deposit to come from an overseas family member, but it often requires extra checks.
Mortgage lenders and solicitors may request additional documentation because international transfers can raise more questions about the source of funds.
Additional proof may include:
- Extra bank statements from overseas accounts
- Evidence of how the funds were built up (e.g. savings or property sale)
- Certified translations of documents
- Proof of the donor’s identity and address abroad
- Clear transfer records showing the money reaching the UK
Overseas gifted deposits are common, but it is important to plan ahead, as checks may take longer.
Common problems that cause delays
Gifted deposits can delay a purchase if the paperwork is not provided early.
Some common issues include:
- The buyer not telling their solicitor about the gifted deposit until late
- Missing bank statements or incomplete financial evidence
- The donor being unable to prove the source of funds
- Overseas transfers taking time to document
- Confusion over whether the money is a gift or loan
The sooner you disclose the gifted deposit, the smoother the conveyancing process will be.
How Versus Law can help
At Versus Law, we regularly assist first-time buyers using a gifted deposit.
Our experienced conveyancing solicitors can:
- Guide you through lender requirements
- Prepare and review gifted deposit letters
- Carry out anti-money laundering checks efficiently
- Help avoid delays before exchange and completion
- Support overseas gifted deposit cases with additional documentation
If you are buying your first home and receiving help from family, we are here to make the process clear and stress-free.
You can get started today by requesting a free conveyancing quote through our calculator:
https://www.versuslaw.co.uk/services/conveyancing/conveyancing-calculator/
Conclusion
A gifted deposit is one of the most common ways first-time buyers in the UK get help onto the property ladder.
While it is completely legal, mortgage lenders and solicitors will always require proof to confirm:
- The money is a genuine gift
- The funds come from a legitimate source
- The giver has no financial claim on the property
By providing the correct documents early, you can avoid unnecessary delays and keep your purchase on track.
For friendly, expert support with gifted deposits and the full conveyancing process, contact Versus Law today and request your free quote online.










