Gifted Deposit in the UK: Who Can Gift Your Deposit and What Documents Are Required?

Buying a property in the UK often starts with one important question: where will the deposit come from?

Not everyone is able to save the entire amount themselves. It is therefore quite common for a family member to provide part or even all of the deposit needed to purchase a property.

This is known as a Gifted Deposit.

However, it is not enough for the money simply to appear in your bank account. The mortgage lender and solicitor will usually need to understand where the funds came from, who provided them and whether the money is genuinely a gift rather than a loan that needs to be repaid.

Let’s look at what a Gifted Deposit is, who may be able to provide one and what documents could be required.

What Is a Gifted Deposit?

A Gifted Deposit is money given to you by another person to help you purchase a property without an obligation to repay it.

This is an important distinction.

If a relative gives you £20,000 on the understanding that you will gradually pay the money back, this would not normally be treated as a straightforward gift.

For a mortgage lender, it may instead represent an additional financial commitment that needs to be considered as part of the affordability assessment.

A Gifted Deposit should therefore be a genuine gift rather than an undisclosed loan.

Who Can Gift Money for a Property Deposit?

Mortgage lenders commonly accept Gifted Deposits from close family members.

For example:

• parents;
• grandparents;
• brothers or sisters;
• other close family members.

However, the exact criteria vary between lenders.

Some lenders may accept gifts from a wider range of relatives, while others have stricter requirements.

If the money is being provided by a friend, partner, more distant relative or another person, it is important to check whether the particular lender will accept this source of deposit.

For this reason, it is better to check the lender’s requirements before a large amount of money is transferred.

What Documents May Be Required for a Gifted Deposit?

The lender and solicitor will usually want to confirm that the funds are genuinely a gift and that they come from a legitimate source.

One document that may be required is a Gifted Deposit Letter.

In this letter, the person providing the money may need to confirm:

• the amount being gifted;
• who the money is being given to;
• that the funds are a gift;
• that the money does not need to be repaid;
• that the donor will not own a share of the property;
• that the donor will not claim rights over the property.

The exact format and requirements can vary depending on the mortgage lender.

Additional documents may also be requested, including:

• proof of identity for the person providing the gift;
• proof of address;
• bank statements;
• evidence of the source of funds;
• documents confirming the relationship between the donor and buyer.

Your solicitor will also carry out the necessary checks regarding the source of the funds.

Why Does the Source of the Money Need to Be Verified?

A bank transfer alone may not be enough.

For example, if £30,000 suddenly appears in your account, your solicitor may ask where the money came from.

If the donor accumulated the money through savings, bank statements may be required to demonstrate how the funds were built up.

If the money came from the sale of a property, documents relating to that transaction may be requested.

The purpose is to establish a clear and transparent history of where the funds originated.

Can a Gifted Deposit Come From Another Country?

In some circumstances, yes.

For many families living in the UK, financial help towards buying a property may come from parents or relatives who live abroad.

However, overseas Gifted Deposits can involve additional checks.

The lender or solicitor may request:

• foreign bank statements;
• evidence showing the source of the funds;
• identification documents for the donor;
• English translations of certain documents;
• explanations of significant transactions.

Preparing these documents early can help avoid unnecessary delays later in the property-buying process.

Can Cash Be Used as a Gifted Deposit?

Large amounts of cash can create additional difficulties.

If money has been held in cash for a long period, demonstrating where it originally came from can be more complicated.

For this reason, depositing a large amount of cash into a bank account immediately before applying for a mortgage may result in additional questions.

The lender and solicitor need to be able to establish the source of the money.

If you are planning to use cash savings, or money that a family member has kept in cash, it is advisable to discuss the situation with your mortgage broker and solicitor in advance.

Does a Gifted Deposit Affect How Much You Can Borrow?

Having a Gifted Deposit is not automatically a problem.

For many buyers, it provides a way to build the deposit needed to purchase their first property.

However, the mortgage lender will still assess other aspects of the application, including:

• your income;
• credit history;
• existing financial commitments;
• property value;
• size of the deposit;
• source of funds.

Different lenders have different criteria, so each situation needs to be considered individually.

Do You Need to Tell the Lender That Your Deposit Is Gifted?

Yes.

If the money has been provided by a family member, it should not be presented as your personal savings.

The source of the deposit should be declared correctly.

If checks later show that the funds came from another person, the lender or solicitor may request further explanations and documentation.

Being transparent from the beginning can help prevent delays during the mortgage process.

What Should You Do Before Applying for a Mortgage?

If you plan to use a Gifted Deposit to buy a property in the UK, it is useful to:

• establish who will provide the gift;
• check the lender’s requirements;
• prepare evidence showing the source of funds;
• keep relevant bank statements;
• avoid unnecessary transfers between multiple accounts;
• tell your mortgage broker about the Gifted Deposit before applying.

This is particularly important if the money is coming from overseas or from several different sources.

What Should You Remember?

A Gifted Deposit is a common way of contributing towards the deposit required to purchase a property in the UK.

The key points are that the money should genuinely be a gift, its source should be verifiable, and the lender’s requirements should be checked in advance.

Good preparation can reduce the risk of additional questions and unnecessary delays during the property-buying process.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

This post is for information purposes only and does not constitute financial or mortgage advice.