First Time Buyer Series – A Helping Hand
For a lot of first-time buyers, the biggest hurdle isn’t the monthly payment. It’s the deposit. Saving a large lump sum while you’re paying rent can feel like running up a down escalator and it’s easy to lose heart when house prices seem to move faster than your savings. The good news is that help from family and friends is more common than most people realise and more straightforward too, as long as it’s done properly.
This is part two of our first-time buyer series. In part one we walked through the whole journey, from working out your budget to collecting the keys. Here we look at the different ways the people around you can help get you onto the ladder, what each one means for them as well as for you and how to do it the right way.
How Family Can Help With Your Deposit
There are four main ways the people around you can help, from a simple gift to a specialist mortgage. Each one works differently, so it’s worth knowing what’s involved before you choose.
The Gifted Deposit
The most common form of help is a gifted deposit, where a family member gives you money towards your deposit with no expectation of it being repaid. It’s usually parents or grandparents, though other relatives often help too. Lenders see gifted deposits all the time, but they do have rules.
What Lenders Will Ask For
The person gifting will usually need to confirm in writing that it’s a genuine gift rather than a loan and that they’ll have no stake in the property. Most lenders have their own form or wording for this, so it’s better to wait until you know who your lender is before anyone signs anything.
Who Can Give You The Money
Not every lender treats every gift the same way. Money from close family is rarely a problem. A gift from a friend or a more distant relative can be a different story, as some lenders won’t accept it and others will want extra checks. A few also want to see some savings of your own alongside the gift. If a friend has offered to help, tell us before any money moves and we’ll find out which lenders are happy with it.
Why The Word "Gift" Matters
If the money is expected back, it’s a loan and that changes how a lender views your application. Even a casual “pay us back when you can” counts. It can feel awkward to talk about, but being clear and honest from the start keeps everything running smoothly and it means nobody has to sign something that isn’t true.
A Note For The Person Giving
Large gifts can have inheritance tax implications for the person giving them. Each person can give away £3,000 a tax year without it being added to the value of their estate. Bigger gifts are generally free of inheritance tax if they live for seven years after making them. If they die within that time, tax may be due depending on the size of their estate and when the gift was made. If it’s a sizeable sum, it’s sensible for them to speak to a tax adviser first.
Note: The inheritance tax information above is correct as of October 2026 and may change in the future.
A Family Loan
Some families prefer to lend rather than gift and that’s perfectly valid too. Parents might need the money back for their own retirement, or want to treat several children fairly over time. The key difference is that a loan is a debt. Lenders will factor any repayments into your affordability assessment, so it could reduce what you’re able to borrow.
Getting It Set Up Properly
A family loan can still work well, but it needs to be declared and structured properly so there are no surprises later in the process. That means putting the amount, the repayments and any interest in writing, so that you, your family and your lender can all see exactly what’s been agreed. It also protects everyone if circumstances change down the line.
Finding The Right Lender
Not every lender will accept a deposit that’s been borrowed, which narrows the field. If a loan is the route your family wants to take, it’s worth a conversation with us early on. We can find lenders comfortable with the arrangement and check that your affordability still stacks up before you commit to anything.
Guarantor & Joint Borrower Mortgages
Sometimes the deposit isn’t the problem. Your income alone just doesn’t quite stretch to the property you want. In that case a family member may be able to support your application directly, rather than handing over a lump sum.
Joint Borrower Sole Proprietor
With a joint borrower sole proprietor mortgage, a relative’s income is taken into account alongside yours to boost how much you can borrow, while you remain the sole owner of the property. They’re named on the mortgage but not on the deeds. As they don’t own any of the home, this can also help you keep your first-time buyer stamp duty relief even if they already own a property themselves. Your conveyancer can confirm how that applies to you.
Guarantor Mortgages
A guarantor is someone who agrees to step in and cover the mortgage if you can’t. Traditional guarantor products are less common than they used to be and joint borrower arrangements have taken over in many cases, but they’re still an option with some lenders.
What It Means For Your Family Member
These arrangements carry real responsibility. Whichever route you take, your relative is agreeing to cover the mortgage if you can’t and if payments are missed it could affect them as well as you. Their own borrowing plans may be affected too, as the commitment can count against them if they want a mortgage of their own. Lenders may also look at their age and how long the mortgage will run into their retirement.
They’re powerful tools when used in the right circumstances and they’re exactly the kind of thing worth talking through carefully with an adviser before committing. It’s often a good idea for your relative to take their own independent legal advice as well.
Specialist Family Mortgages
Beyond the standard options, some lenders offer products designed specifically around family support. They suit families who want to help but would rather not give away money they may need later.
Savings Held As Security
In this arrangement a family member’s savings are held as security instead of a cash deposit. The money stays theirs, but it’s tied up in a linked account for a set period and it’s at risk if you fall behind on your payments. If all goes to plan, they get it back once the term ends.
Using Property Equity
Some products allow a family member to use the equity in their own home to support your borrowing, by giving the lender a legal charge over part of its value. No cash changes hands, but their home is on the line if things go wrong, so it needs just as much thought.
Finding The Right Fit
These products are less well known, which is exactly why having a broker who knows the whole market pays off. Availability changes and the terms vary from one lender to the next. We can look across these specialist products and match you to the one that fits your family’s situation, rather than leaving you to find them alone.
How To Prepare For Family Help
Whichever route suits you, a bit of preparation makes the whole process easier for everyone involved.
The Checks You Should Expect
One thing that catches families by surprise is just how thoroughly the source of any gifted or loaned money is checked. Lenders and solicitors are legally required to verify where deposit funds come from, partly to meet anti-money-laundering rules.
What You'll Likely Need
The person providing the money will usually be asked for:
- Photo ID and proof of address
- Bank statements showing the money in their account
- Evidence of how the funds were built up, such as savings, a property sale or an inheritance
- A signed letter confirming the gift
None of this is anything to worry about if the money is legitimate, which of course it is. It simply means it’s worth preparing the paperwork early rather than scrambling for it later. The clearer the evidence, the smoother the application tends to be. It’s one more area where we can guide you, so you know what’s needed and when.
Doing It The Right Way
Whatever form the help takes, the golden rule is the same. Be open about it from the start. Lenders need a clear picture of where your deposit comes from and what, if anything, is owed. Getting this right early helps to avoid delays later and it’s one of the many things we handle for you as part of the process.
It’s also worth having an honest conversation as a family. Agree what’s being given or lent, what happens if circumstances change and whether anyone expects something in return. A short chat now can save a difficult one later.
Family generosity is a wonderful thing. Our job is simply to make sure it’s channelled in the way that helps you most and that everyone involved understands their role.
Talk Through Your Options
If someone close to you has offered to help, or you’re wondering whether they could, we’d be glad to talk it through with you both. We’ll look at what’s possible and which route suits your family, with no pressure to go any further than you’re ready to.
Coming next in the series, part three looks at the mortgage options available to you, from fixed and variable rates to the terms that shape your monthly payment.