First-Time Buyer Gets on the Ladder in Hackney

Priya, 29, works as a data analyst earning £52,000 a year. She had managed to save £18,000 of her own money and her parents had offered to gift her a further £35,000, giving her a total deposit of £53,000. She had found a leasehold flat in E8 priced at £370,000, with 118 years remaining on the lease.

She had one missed payment on a phone bill three years earlier. It was a single blip, she had not missed any credit payments since, and her credit score had recovered. But when she applied to two high street lenders, both declined. One cited the missed payment, the other cited concerns about the gifted element of her deposit.

Two issues had combined to make mainstream lenders cautious. First, the gifted deposit. Lenders are required to carry out anti-money-laundering checks on gifted funds and some have very strict requirements around the source of the gift, the relationship between donor and recipient, and whether the donor expects any claim on the property. Priya's parents were happy to sign a gift letter confirming no interest in the property, but one lender declined anyway.

Second, the phone bill missed payment. While relatively minor, it showed as a default on her credit file with one credit reference agency. Some lenders have automated scoring systems that decline any applicant with a default in the past three to six years regardless of the circumstances.

We identified a lender that has a considered view of adverse credit. For a single satisfied default over three years old, this lender will look at the full credit picture rather than auto-declining. We prepared the application to present the phone bill missed payment in context: isolated incident, all other credit clean, long-term trend positive.

On the gifted deposit, we worked with Priya's parents to prepare the correct documentation, including a gift letter in the lender's required format, three months of bank statements from the parents showing the source of funds, and a brief covering note explaining the family relationship. The lender accepted this without issue.

The 118-year remaining lease was not a problem for this lender, which accepts leases down to around 70 years unexpired.