The Client:
Our client approached us looking to purchase their first home. While they had built up a deposit through savings, part of the funds had been gifted by their partner, who was already on the property ladder.
Although the gift was initially declared without the expectation of repayment, the partner wanted reassurance that their contribution would be protected in the event of a relationship breakdown. Finding a lender willing to accommodate this requirement while allowing both parties to live in the property presented a significant challenge.
At a Glance:
- First-time buyer with a deposit made up of personal savings and a partner’s gifted contribution
- Requirement to protect the gifted funds in the event of a relationship split
- Most lenders would not allow the gifted party to live in the property due to conflict of interest
The Case:
Our client had their heart set on a four-bedroom home in Buckinghamshire and had worked hard to save for their deposit. However, their partner contributed additional funds to help bridge the gap and enable the purchase.
Situations like this are increasingly common, where couples come together at different stages of the property ladder but want to move forward jointly. While straightforward in principle, they often introduce complexity around ownership, equity, and the source of funds.
In this case, although the relationship was strong, the partner wanted to ensure their financial contribution was protected. Ideally, they wanted a legal mechanism such as a charge against the property. However, most lenders are unable to accommodate this, particularly where the person gifting the funds will also reside in the property, as this creates a conflict of interest.
The Challenge:
The key challenge was balancing two competing requirements:
- The lender’s need for a straightforward gifted deposit with no ongoing interest
- The partner’s desire to protect their financial contribution
Most lenders would decline the case outright or insist on the deposit being an unconditional gift with no protections in place, leaving the clients exposed to potential future disputes.
The Solution:
Using our lender relationships, we approached a lender willing to review the case on its individual merits. After discussing the scenario in detail with the Business Development Manager, we secured agreement on a tailored solution
The lender allowed a formal condition to be applied stating that:
- The gifted funds could be repaid, but only upon the sale of the property
- The contribution would remain interest-free
- The partner would have no additional legal claim or charge over the property
This structure struck the right balance—giving the partner reassurance that their contribution was protected, while still meeting the lender’s criteria.
With both parties comfortable with the arrangement, we were able to proceed smoothly to offer and secure the mortgage.
Property Details:
Property value: £342,500
Loan amount: £297,000
LTV: 88%
Term: 40 Years, capital and interest repayment
Mortgage payment: £1,318.07 per calendar month
Lender arrangement fee: £0
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