Proof of funds-cash buying a house-any advice

counting_the_pennies

Hi,
After saving for years plus a few shareholder dividends I had enough to buy a small property. The conveyancer asked for proof of funds and I sent a bank statement. I then received a letter asking for 6 months of statements so they could see how the money had accrued. I supplied these and have just had a letter asking for more so that they can see how the 'opening balance' of the 6 month old statement was achieved. This could go on as the money has mounted up slowly over more than a decade. Is this really neccessary/usual. Why can't one statement showing proof of funds be sufficient? I feel slightly aggrieved.:(

DreamerV

counting_the_pennies wrote: »

Hi,
After saving for years plus a few shareholder dividends I had enough to buy a small property. The conveyancer asked for proof of funds and I sent a bank statement. I then received a letter asking for 6 months of statements so they could see how the money had accrued. I supplied these and have just had a letter asking for more so that they can see how the 'opening balance' of the 6 month old statement was achieved. This could go on as the money has mounted up slowly over more than a decade. Is this really neccessary/usual. Why can't one statement showing proof of funds be sufficient? I feel slightly aggrieved.:(

My brother went through this, and no matter what he supplied it wasn't enough. I went through a different guy, and even when I tried to pre-empt by showing documents, he insisted it was fine and not to worry. I think it is necessary to a point, but in your case it seems a bit excessive (IMO). Not unheard of though.

counting_the_pennies

DreamerV wrote: »

My brother went through this, and no matter what he supplied it wasn't enough. I went through a different guy, and even when I tried to pre-empt by showing documents, he insisted it was fine and not to worry. I think it is necessary to a point, but in your case it seems a bit excessive (IMO). Not unheard of though.

Many thanks, glad to know I am not alone!

G_M

Money laundering rules have titghtened up considerably. Drug dealers, gangsters, people traffickers and criminals generally often use property purchase as a way to invest their ill-gotten gains and legitemise their money.

So solicitors (like banks) now have to check the source of funds. The trouble is
1) this really p*sses off and inconveniences the law-abiding general public (as you are finding) and
2) there is no real hard rule of what they are expected to do - just guidelines.... and penalties if they don't!

counting_the_pennies

G_M wrote: »

Money laundering rules have titghtened up considerably. Drug dealers, gangsters, people traffickers and criminals generally often use property purchase as a way to invest their ill-gotten gains and legitemise their money.

So solicitors (like banks) now have to check the source of funds. The trouble is
1) this really p*sses off and inconveniences the law-abiding general public (as you are finding) and
2) there is no real hard rule of what they are expected to do - just guidelines.... and penalties if they don't!

I am so glad you understand how I feel. Yes, p**** off. I am a very boring, law abiding person, not used to being treated as if I could be a criminal. After receiving this letter today I pinged off an e mail to the solicitor saying that my bank satements just show my monthly salary coming in plus a few nice dividends from a company which I named in which I am a biggish shareholder, all declared to the inland revenue, all tax paid. I don't suppose that will do any good whatsoever. There could come a time when someone could get so fed up that they dropped out of purchasing a property.

tommie1shunt

You could always tell them you have done enough "proof of funding" and if they don't like it they can swivel on it. It's not big and clever, but can be quite satisfying.

counting_the_pennies

Thank you for your comments.
After my last post here, I was asked by the solicitor to supply more Bank statements showing how the balance had accrued, I sent them statements back to April 2010. I really thought this would be sufficient but have now received another letter saying 'I will need to see further evidence of funds accumulating over time' I was outraged and for 2 pins would drop out of the house purchase but I really like the property and this all means that it is impossible to buy a house with personal cash/savings. I phoned my Bank and they have sent a letter confirming that I have been saving with them since 1990. I am just about to send this off but if that doesn't work what would?!!! Has anyone else ever had this problem and how was it resolved?:(:think:

Mother_Pratt

I had the same problem two years ago when we were purchasing a house. The solicitors insisted that I account for every transfer over £2k my hubby and I had made over the last 3 years. It took me absolutely AGES

Thinking about it, the banks are responsible for making sure their customers aren't laundering money. So if they'd suspected anything they would already have taken action.

I'm not sure all solicitors are so fussy. It really seems like overkill to me, and like you, I only complied because I really wanted the house.

missile

AFIK it is your solicitor who is responsible for checking where the money comes from? If this is your solicitor, I would go see a.n.other. My solicitor knows me well and I was not asked to provide any evidence to prove where my funds came from.

Bank statements for 2 years would seem more than enough to satisfy money laundering regulations. If the payments into your account were suspicious the bank ought to have checked the source.

SuzieSue

It is fortunate that the OP has saved with only one bank otherwise it would be a lot worse.

I know someone who is thinking of buying a property and has saved up over £300,000 over the last 20 years by living with their parents rent free. They have continuously moved their savings (which are with up to 6 different banks) to take advantage of the best savings rates so I dread to think how they are going to prove where their funds came from.

freyuk

Had the same problem, at least 6 times was asked for statements, after being very helpfull with it, I started to get really fed up with the situation, so sent a couple of emails to solicitor arguing that if they were suspicious of were my funds came from, by the law, they should reported it to Inland Revenue, after that I phoned them and told them I would send a last one, after that I will change solicitors.