The ‘Bank of Mum & Dad’ - Practical Guidance for Conveyancers

Introduction

A Legal and General report has revealed that the ‘Bank of Mum and Dad’ (‘BoMaD’) provided £6.3 billion in funding in 2019 to help loved ones buy property worth over £70 billion.

However, the report warns that:

‘At a time when increasing longevity means retirement savings have to last ever longer, it risks eroding many older people’s finances when they need financial security. BoMaD support usually comes from the very same pots used to fund their care and retirement. Parents, grandparents, and even friends are accessing cash savings, ISAs, home equity and pensions to serve as BoMaD lenders’.

In addition, parents who make such financial contributions typically face a whole host of other risks of which they are unaware. Therefore, it is imperative that any legal advice which they receive informs them fully of the effect and foreseeable consequences of the proposed transfer of funds.

What You Will Learn

This live and interactive session will cover the following:

• Lender requirements: gifts, loans, declarations of trust
• Tax implications of gift or loan
• The importance of supporting written documentation
• The degree of understanding required by parents making a gift
• Issues to consider when the son or daughter buys property jointly with a third party
• Other funding arrangements: such as second charges, remortgaging the parents’ home and guarantor mortgages
• AML checks to be undertaken
• Seller’s gifted deposits as an alternative to funding a purchase
• Practical implications of selected cases

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.