Be prepared for Bank of Mum and Dad debt call

February 2012

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

Brain Chase Coles, which is one of the national Law Society’s Conveyancing Quality Scheme members, says 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.

Jon Coles, Partner and Head of the Property Department comments: “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.”

Stamp Duty Holiday

With the stamp duty holiday for first-time buyers buying properties under £250,000 due to end on March 24, there could be a rush to buy amongst first time buyers.

Jon Coles says: “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 will also 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 will we offer the best advice and service, as recognised by our CQS status, we will help to avoid some unforeseen hazards that may occur down the line.”

Brain Chase Coles underwent a rigorous application and 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

Previous Article:
Solicitors – A Caring Profession
Next Article:
“Captain Corelli” Author Advocates Mediation

Contact Us


client testimonials

“Thank you again for your time and advice and for being a compassionate, understanding and yet objective voice through this time.”