Are you purchasing a property with a partner and contributing a larger share of the deposit or is a family member helping you?
Increasing numbers of people are purchasing property through the assistance of family members. This is due to the significant sums needed as a deposit, an increase in house prices and lenders tightening their rules and criteria for lending. If you are contributing a larger share of the purchase price to a property with your partner (either due to assistance from family or from your own assets) protection of these loans or gifts is important.
You and your partner may benefit for entering into a Declaration or Deed of Trust. This document records what you intend to happen to the house in the event it is sold in the future, for example it can state that the initial funds you each contributed will be returned before the remainder of any net proceeds of sale are divided equally. If a family member assisting you it can also state the funds to be returned to them before the division of the proceeds.
By entering into this document it eliminates the risk of costly disputes arising in the future and creates peace of mind for all concerned.
Alternatively, if a family member is helping you purchase the property they may also consider registering their interest against your property if the funds are intended as a loan. This interest can be registered through a Declaration or Trust or by way of a charge and is removed once full payment has been made and would usually be payable upon sale of the property if payment is still outstanding at that point.
For more information contact Gemma Davison on 01295 759410.