Gifted deposits (UK): what lenders typically ask for and common pitfalls
A UK guide to gifted deposits: what a lender gift letter/form usually covers, what evidence is commonly requested, 3 worked examples, and the pitfalls that delay offers.
Summary
A gifted deposit is money given to you for a deposit with no expectation of repayment and usually no claim on the property. Lenders often ask for a letter or form to confirm this, plus evidence showing where the money came from.
This guide explains what lenders typically ask for, why delays happen, and how to prepare a clean evidence pack before you apply.
- Deposit calculator: /house-deposit/
Key terms (quick definitions)
- AIP: early borrowing indication. See: AIP.
- Deposit gap: the shortfall between the deposit you have and the deposit you need. See: Deposit gap.
- Conveyancing: legal work where source-of-funds checks also happen. See: Conveyancing.
How it works
1) The lender needs to know it’s a gift (not a loan)
Most lenders want a clear statement that:
- the money is a gift,
- it’s not repayable,
- the donor won’t live in the property (often asked, not always),
- the donor won’t have a beneficial interest/ownership claim.
Nationwide, for example, uses a gifted deposit form and asks applicants to disclose gifts received in the last 12 months (rules and thresholds vary by lender).
2) The lender (and your solicitor) needs a paper trail
The biggest reason gifted deposits slow applications isn’t the gift letter — it’s missing or unclear evidence.
Examples of what might be requested:
- donor’s bank statements showing funds leaving their account
- your bank statement showing the funds arriving
- source-of-funds evidence if the money came from somewhere else first (sale of an asset, savings, etc.)
3) Timeline impact
Gifted deposits add a “third party” to the process. If the donor is slow to provide documents, your timeline to offer can stretch.
Related: /guides/mortgage-application-timeline-uk-from-aip-to-offer/
Worked examples
Example 1: How a £15,000 gift changes the deposit percentage
Assume a purchase price of £300,000 and you have £10,000 of your own savings.
- Without a gift: deposit = £10,000 → 3.33%
- With a £15,000 gift: total deposit = £25,000 → 8.33%
Use the deposit calculator to see how different deposit sizes change the mortgage amount and (often) the LTV band you fall into.
Example 2: Gift received recently (evidence pack needed)
Assume your parent gifts £20,000 shortly before you apply.
In practice, you’ll want to be able to show:
- donor account → transfer to you (bank statements)
- your account receiving the funds
Some lenders set their own rules about how much proof is needed depending on where the funds came from. Treat the lender’s request list as the minimum — and prepare it early.
Example 3: The “deposit gap” trap
Assume you need a £30,000 deposit but you currently have £22,000.
- Deposit gap = £8,000 (see: Deposit gap)
If you wait until you’ve found a property to arrange the gift, you can create an avoidable delay. A cleaner approach is to agree the gift early and keep the evidence ready, then apply when you’re confident the deposit is complete.
Common mistakes
- Calling it a “gift” when it’s actually expected to be repaid.
- Not telling the lender/broker early that part of the deposit is gifted.
- Moving money through multiple accounts without keeping a clear paper trail.
- Donor documents arriving late (and stalling underwriting).
- Donor wording that implies ownership (“I’ll get my money back when you sell”) — lenders don’t like ambiguity.
- Forgetting that your solicitor will also ask for source-of-funds checks during conveyancing.
What to do next
- Related guides:
- Related glossary:
- Related calculator: