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The Bank of Mum and Dad: Protecting your Investment.

The Bank of Mum and Dad

Parents spend so much money to help their children get onto the housing ladder, that they are now among the biggest lenders in the UK, a recent survey has confirmed.

The average parental contribution for home buyers this year is £24,100 which has increased by £6,000, compared to 2018, according to Legal & General. 

Collectively, parents have given an astonishing £6.3 billion, which is high enough to rank the “Bank of Mum and Dad” as number ten in the Top 10 of mortgage lenders (if it was a mortgage lender!) 

Thousands of UK buyers are reliant on their parents to either get onto the housing ladder or upgrade to a larger home. 

For those adult children who are receiving these deposits, it is sensible to consider how to protect them, particularly if they decide to invest them in a jointly owned home with a partner whom they choose to cohabit with.   

There is a straightforward way to do so in Scotland, which is to enter into a legally binding Cohabitation Agreement.  This is an agreement between a couple, which sets out the matters they would like to regulate.   They can be simple, for example, providing that a deposit is returned to the party who invested it should they separate or they can also provide for more complicated arrangements.  Each Agreement can be tailored towards the specific details of a couples’ financial arrangements.   Each party should have their own solicitor and a family law solicitor should be responsible for drafting the Agreement.

Our Family Law Team is well used to advising those who wish to protect the deposits which they have received from family members.  We will also advise on the legal implications of cohabiting which are set out in the Family Law (Scotland) Act 2006; implications which are not well known despite the age of the legislation.  Simply put, this Act has brought in limited rights for cohabitants – to make financial claims one year post-separation and also to make a claim 6 months post-death on the intestate estate of their deceased cohabitant.

When considering the size of deposits that are often invested, it certainly makes sense to consider an Agreement to ensure that should a separation occur, there is a clear mechanism for dealing with the financial matters and for saving the stress and expense of a potential dispute in the years to come.

Jennifer Broatch is a Family Law Solicitor. If you would like to discuss Cohabitation Agreements, please contact Jennifer on or call 0131 225 8705.

About the author

Jennifer Broatch
Jennifer Broatch

Jennifer Broatch



For more information, contact Jennifer Broatch or any member of the Family team on +44 131 624 6850.