When purchasing a property, your conveyancer will request proof of the source of your funds. While this may initially seem unnecessary, it is in fact a legal requirement and an essential safeguard in the conveyancing process. Establishing the legitimacy of monies used in a property purchase protects clients, conveyancers, and the wider property market.
What does “Source of Funds” mean in Conveyancing?
The term “source of funds” refers to the origin of the money being used to buy a property. This may include:
- Personal savings built up over time;
- Proceeds from the sale of another property or asset;
- An inheritance from an estate;
- Investment or dividend income;
- A financial gift from a family member;
- A mortgage advance from a lender.
Conveyancers are required to obtain documentation to verify these funds. Examples include bank statements, inheritance paperwork, property completion statements, or formal gift letters.
If you are buying a property then you can use our FREE ONLINE CONVEYANCING CALCULATOR to get an instant and no-obligation online conveyancing quote. If you’d prefer to speak with a person, simply call us at any of our offices to speak to our expert residential conveyancing solicitors.
Why do conveyancers ask for proof of source of funds?
1. Compliance with Anti-Money Laundering Regulations
Solicitors are bound by strict Anti-Money Laundering (AML) legislation. Property transactions are sometimes exploited by criminals seeking to “clean” illicit funds. By conducting thorough source of funds checks, conveyancers ensure compliance with AML regulations and uphold the integrity of the property market.
2. Protecting property buyers
Verifying funds is also in the best interests of the purchaser. If money used in a property transaction is later linked to criminal activity, authorities may have the right to seize the property, even if the buyer was unaware. Proper AML checks during conveyancing help safeguard your investment.
3. Preventing delays and transactional risks
If satisfactory evidence of funds is not provided, the conveyancing process may be delayed or, in some cases, the transaction could collapse. Supplying clear documentation at the outset ensures a smoother and more efficient property purchase.
What documents may be required as proof of source of funds?
Depending on your individual circumstances, your conveyancer may ask for:
- Recent bank statements showing the accumulation of savings;
- A grant of probate or executor’s letter confirming inheritance;
- A completion statement from the sale of another property;
- Statements from investments or shareholdings;
- A signed gift letter and supporting bank statements from the donor.
How clients can support the process
To assist your conveyancer in completing the necessary checks:
- Be open and transparent regarding the source of your funds;
- Provide documentation promptly when requested;
- Avoid unnecessary transfers between accounts, which complicate the audit trail;
- Retain copies of all relevant paperwork.
What to Expect in the Initial Stages of a Conveyancing Transaction
There are many steps involved in the initial stage (which we often call the initial instructions) of conveyancing. In this blog by Jemima Abbey-smith, we attempt to break them down into easy-to-understand and digestible steps.
Conclusion
Providing proof of source of funds is a crucial part of any property purchase. While it may feel burdensome, these checks are in place to comply with anti-money laundering regulations, protect property buyers, and ensure a secure transaction.
If you are preparing to purchase a property and require advice on evidencing your funds, our experienced conveyancers are here to guide you through every stage of the process with clarity and professionalism.
Ensure your property purchase runs smoothly. Contact our specialist Residential Conveyancing solicitors in Yorkshire.
If you are preparing to buy a property and need advice on evidencing your source of funds, our experienced conveyancing team can guide you through the process. We provide clear, practical advice to help you meet legal requirements and avoid unnecessary delays.
Speak to our expert residential conveyancing solicitors in Wakefield, Ossett, Garforth, and Sherburn in Elmet, Yorkshire today by calling 01924 290 029 or ask a question using our online enquiry form.
The content of this blog post is for information only and does not constitute formal legal advice and should not be relied upon as advice. Thornton Jones Solicitors Limited accepts no liability for any such reliance upon this content. Where the post includes links to external websites, Thornton Jones Solicitors Limited accepts no responsibility for the content of such s
Proof of Source of Funds FAQs
The “source of funds” refers to the origin of the money used to buy a property. This could include savings, proceeds from selling another property, inheritance, investments, or a financial gift. Conveyancers need this information to verify the legitimacy of the funds.
Conveyancers are required by Anti-Money Laundering (AML) regulations to confirm that property funds are legitimate. Verifying your funds protects you, your solicitor, and the property market from potential financial crime.
Depending on your situation, you may need to provide bank statements, inheritance paperwork, property sale completion statements, investment records, or signed gift letters from family members.
The verification process varies but is usually completed quickly if you provide clear, organised documentation. Delays often occur when paperwork is missing, unclear, or requires additional explanation.
If sufficient evidence isn’t supplied, the conveyancing process may be delayed or, in some cases, the property purchase could fail. Providing full and transparent documentation ensures a smoother, legally compliant transaction.
