Source of Funds: What You Need to Know

When buying a property, you will be asked where your money is coming from. This is a normal and essential part of the legal process and something all conveyancers are required to do.

Why are we asking?

We are legally required to carry out checks under Anti-Money Laundering regulations. This means we must:

• Confirm where your purchase funds are coming from (Source of Funds)

• Ensure your overall financial position matches the transaction (Source of Wealth)

  
  

This is not about mistrust—it’s a standard requirement for every property transaction.

We also need to ensure that:

• our mortgage application information is accurate

• You have enough funds to complete your purchase

What Information Will You Need to Provide?

The documents we request will depend on your circumstances, but may include:

Savings

If you are using savings, we may ask for bank statements showing how the funds have built up over time.

Gifts from Family or Friends

If someone is helping you financially:

• They must confirm the money is a gift, not a loan or ownership interest

• We will verify their identity and the source of their funds

Inheritance

We will usually need written confirmation from the solicitor dealing with the estate.

Bonuses, Winnings or Windfalls

Evidence will be required for any large or unusual payments, such as:

• Lottery or premium bond winnings

• Work bonuses or other one-off payments

Compensation or Insurance Payments

We may need supporting documents and bank statements showing receipt of funds.

Loans from Friends or Family

If money is being loaned:

• We’ll need details of repayment terms

• Your lender must be informed and agree to the arrangement

  
  

Money from Abroad

Additional checks are required if funds are coming from overseas—so it’s important to tell us early.

Important Rules to Be Aware Of

• All purchase funds must pass through us—you cannot pay the seller directly

• We cannot accept cash payments

• We cannot accept funds from third parties unless fully verified

Gifted Deposits and Price Reductions

If part of the purchase price is being “gifted” by the seller, this must be:

• Properly documented

• Disclosed to your mortgage lender

• Reflected correctly in the legal paperwork

Why This Matters

These checks protect everyone involved in the transaction. They also ensure:

• Compliance with strict legal obligations

• Transparency with your mortgage lender

• That your purchase can proceed smoothly

  
  

If we don’t complete these checks properly, transactions can be delayed or in some cases, unable to proceed.

When Should You Provide This Information?

As early as possible. We must complete these checks before we can fully progress your matter, so delays in providing documents can slow things down.

How We Can Help

At JB Property Law, we aim to make this process as straightforward as possible. We will:

• Explain exactly what we need and why

• Keep requests proportionate and relevant

• Guide you through each step

If you’re unsure about anything just ask. We’re here to help make your move as smooth as possible.