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Protect your deposit

View profile for Andrew Leakey
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It seems that a day doesn’t go by without mortgage lenders being in the news. The latest statistics show that mortgage lenders are continuing to ration the size of their loans to homebuyers and people remortgaging. The number of deals on offer has risen by 66% this year from 1,414 in January to 2,351 now says the financial information service Moneyfacts. But 58% of the deals available still require a down payment of at least 25% of the value of the home being bought.
 
The word of warning here is for those who are paying the deposits. Buyers who are contributing large deposits should make sure they are protected especially when purchasing property in joint names. I deal with a large amount of cases where one party has paid a large deposit for the property with the joint owner contributing nothing or little. If the property is bought jointly, without provision being made for the return of the deposit people are effectively gifting their partner half of the deposit they have paid following the purchase of their jointly owned home. This is because when properties are purchased as joint tenants or tenants in common in equal shares this means that the equity in the property is divided equally between them. There are various provisions available when purchasing property and you are able to choose any declaration that meets your requirements. For example if one party provides a deposit of £20,000 the joint declaration could read ‘The first £20,000 to Mr X and the remainder to be divided equally between the parties’. This protects the deposit that has been put into the property by one party.
 
This advice should have been provided to you on purchase of your property by the solicitors dealing with the purchase. If in the event that it was not then you may be able to bring an application for professional negligence against your solicitor. They should have advised you in respect of methods available to protect the deposit you are putting down. 
 
If this has happened to you Stephensons are able to deal with all professional negligence disputes or alternatively can help draft a cohabitation agreement now that will potentially override the joint declaration you signed when you purchased your property to allow you the return of your deposit (provided your partner agrees to sign it!)
 
By consumer executive, Gillian Lavelle
 

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