Home-buyers who turn to the “bank of mum and dad” and, increasingly the “bank of grandparents”, to buy their home need to prepare for the all eventualities as generous family members tighten their belts.

As one of the national Law Society’s Conveyancing Quality Scheme members, we find that many people have no choice but to turn to parents or other family members to help raise a deposit for a house without considering potential future pitfalls, even the possibility that their family lenders might need the loan back.

“Handing over a large amount of money, which could be life savings, with no legal structure in place is a minefield. Circumstances can change drastically. Couples buying their first home might borrow from their parents when they buy, but what happens if they subsequently separate?

"There are potential problems in relation to who owns what and raises the prospect of disputes. It is important to consult a Solicitor on loan agreement terms, even with family members, to avoid what could become a family fall-out.

“In these times of economic uncertainty, it is very possible that the “bank of mum and dad” needs to call in its debts. An agreed timetable for repayment can help to ease any potential problems for all parties involved.”

Also, with the stamp duty holiday for first-time buyers buying properties under £250,000.00 due to end on the 24th March, there could be a rush to buy amongst first time buyers.

“With lending from the major banks still cautious, first time buyers will inevitably turn to other sources, such as family members, for help to beat the stamp duty holiday. Not seeking legal advice could cost you dear in the long run.

“We can talk through all the options available, and provide alternatives, such as parents acting as loan guarantors or entering into a joint ownership agreement. We are trained experts and are highly experienced in navigating the maze of paper work and dealings with house purchases. Not only can we offer the best advice and service, as recognised by our CQS status, we can also help to avoid some unforeseen hazards that may occur down the line.”

We have undergone a rigorous assessment by the national Law Society to become part of CQS initiative, which recognises high quality in residential conveyancing.

For more information on the Law Society's Conveyancing Quality Scheme visit www.lawsociety.org.uk/cqs