Proof of Deposit Explained: What Sellers Should Know

When a buyer makes an offer on your property, one of the first things you should establish is whether they can actually afford to buy it. For mortgage buyers, this means checking two things: that they have a lender willing to provide a mortgage, and that they have the deposit — the cash contribution they need on top of the mortgage. Proof of deposit is the evidence that the second part is in place.

Too many sellers accept an offer without checking the buyer's deposit position, only to discover weeks into conveyancing that the funds are not available, not yet saved, or dependent on money that has not materialised. This guide explains what proof of deposit is, what forms it takes, how it is verified, and what you as a seller should be looking for before you commit to a buyer. For a broader overview of buyer financial checks, see our guide on proof of funds: what to ask a buyer for.

What is proof of deposit?

Proof of deposit is documentation showing that a buyer has the cash needed to cover the deposit portion of a property purchase. The deposit is the difference between the mortgage amount and the purchase price. For example, if a buyer is purchasing a property for £300,000 with a £270,000 mortgage, the deposit is £30,000 — and proof of deposit is the evidence that this £30,000 exists and is accessible.

Most residential mortgage lenders in the UK require a minimum deposit of 5% to 10% of the purchase price, although many buyers put down more. According to UK Finance, the average first-time buyer deposit in England in 2025 was approximately £53,000. For home movers, the figure was substantially higher because many buyers use equity from their previous property.

Proof of deposit is distinct from a mortgage agreement in principle (AIP). The AIP confirms the lending side — what the lender is provisionally willing to offer. The proof of deposit confirms the buyer's own contribution. Together, they make up the complete proof of funds for a mortgage buyer.

Why proof of deposit matters for sellers

Approximately one in three agreed property sales in England and Wales falls through before completion, and buyer financing problems are one of the leading causes. A buyer whose deposit is not genuinely available is a buyer whose mortgage lender will ultimately refuse to issue a full offer — and your sale will collapse. For more on the reasons sales fail, see our guide on why house sales fall through.

Checking proof of deposit before accepting an offer protects you in several ways:

• Reduces fall-through risk. A buyer who can demonstrate their deposit is already available is far less likely to fail at the mortgage application stage than one who is still saving or relying on uncertain funds.
• Saves time and costs. If a buyer cannot complete, you lose the weeks spent in conveyancing plus the legal and search costs you have already incurred.
• Helps you compare offers. When you receive multiple offers, the strength of each buyer's deposit evidence should be a factor in your decision — not just the headline price. See our guide on how to choose the right buyer for more on this.
• Protects your chain. If you are buying onward, your buyer's failure to complete will collapse your own purchase and potentially the entire chain above you.

Types of evidence accepted as proof of deposit

The specific documents that constitute proof of deposit depend on where the buyer's deposit money is coming from. Below are the most common sources and the evidence required for each.

Personal savings

The most straightforward type of deposit evidence. The buyer provides recent bank statements or savings account statements (dated within the last three months) showing the deposit amount is available. The statements must clearly show:

• The account holder's name (matching the buyer's name)
• The financial institution's name and logo
• The account balance, showing it covers the required deposit
• The statement date

If the deposit is spread across multiple accounts, the buyer should provide statements for all relevant accounts. Lenders and solicitors will check that the combined total covers the deposit.

Lifetime ISA or Help to Buy ISA

Buyers who have been saving into a Lifetime ISA (LISA) receive a 25% government bonus on their contributions (up to £1,000 per year). The buyer should provide their most recent LISA or Help to Buy ISA statement showing the current balance including any bonus entitlement. Note that the government bonus on a LISA is not paid directly to the buyer — it is claimed by the buyer's solicitor during the conveyancing process and applied to the purchase. This means the bonus will not appear on the buyer's bank statement.

Gifted deposits

Gifted deposits are increasingly common, particularly among first-time buyers. According to research by Legal & General, the “Bank of Mum and Dad” contributes to approximately one in four property purchases in the UK. A gifted deposit is money given by a third party — almost always a parent or close family member — for the buyer to use as part or all of their deposit.

Gifted deposits require specific documentation:

• Gifted deposit letter. A signed declaration from the donor confirming the amount of the gift, the relationship between the donor and the buyer, that the money is a gift and not a loan, that the donor has no expectation of repayment, and that the donor will not seek any interest in the property.
• Donor's bank statements. The donor must provide their own bank statements showing the funds are available and, once transferred, showing the money leaving their account and entering the buyer's account.
• Donor's identification. The buyer's solicitor will need to verify the donor's identity as part of anti-money laundering checks.

As a seller, you do not need to see all of this documentation yourself, but you should confirm that the buyer is aware of the requirements and has the gifted deposit letter in place (or in progress). A buyer who mentions a gifted deposit but has not discussed the documentation with their solicitor or mortgage broker may face delays later. For more detail, see our guide on buyer gifted deposits and what they mean for your sale.

Inheritance

Money received through an inheritance can be used as a deposit, but additional paperwork is needed to satisfy anti-money laundering requirements. The buyer's solicitor will typically request:

• A copy of the grant of probate or letters of administration
• A letter from the executor or estate solicitor confirming the distribution of funds
• Bank statements showing the inheritance being received into the buyer's account

Inheritance-funded deposits can take longer to verify than savings because the solicitor needs to trace the funds through the estate administration process. If your buyer mentions they are using an inheritance, factor this into your timeline expectations.

Proceeds from a previous property sale

Buyers who are selling their own property often use the equity from that sale as their deposit. In this case, proof of deposit may include:

• A memorandum of sale confirming their own property is under offer
• A completion statement from a previous sale showing net proceeds
• Bank statements showing the sale proceeds have been received

A deposit funded by a property sale that has not yet completed carries more risk than one funded by savings already in the bank. The buyer's deposit is contingent on their own sale going through, which means your sale is effectively dependent on a chain. For more on managing this, see our guide on when a buyer can pull out of a property purchase.

Investments or shares

If the buyer's deposit is held in investments, stocks, or shares, they will need to provide account statements showing the current value and evidence that the funds can be liquidated in time for completion. Investment-based deposits can introduce timing risk if markets move or if there are lock-in periods on certain products.

The mortgage agreement in principle

While the agreement in principle (AIP) is not proof of deposit itself, it is the other half of the picture for a mortgage buyer. The AIP confirms the lending amount; the proof of deposit confirms the buyer's own cash contribution. Together they should add up to at least the agreed purchase price.

When reviewing a buyer's financial position, check that:

Solicitor verification and anti-money laundering

While you as a seller should carry out basic checks on the buyer's deposit position, the formal verification is handled by the buyer's solicitor. Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, solicitors and licensed conveyancers are legally required to verify the identity of their clients and the source of their funds.

This means the buyer's solicitor must establish not just that the deposit money exists, but where it came from and how the buyer acquired it. The solicitor will:

• Verify identity. Check the buyer's passport or driving licence and proof of address, usually a recent utility bill or council tax statement.
• Verify source of funds. Request documentation showing where the deposit money originated — whether from employment income, savings, a gift, inheritance, or the sale of assets.
• Verify source of wealth. For larger deposits or where the source is not immediately clear, the solicitor may need to understand the buyer's broader financial background to satisfy themselves the funds are legitimate.
• Screen against sanctions lists. Check the buyer's name against government sanctions lists and politically exposed persons (PEP) databases.
• File suspicious activity reports. If the solicitor has any concerns about the legitimacy of the funds, they are legally obliged to file a suspicious activity report (SAR) with the National Crime Agency (NCA) under the Proceeds of Crime Act 2002.

Your estate agent also has anti-money laundering obligations. Under the same regulations, estate agents are required to carry out customer due diligence, which includes verifying the buyer's identity and conducting basic checks on the source of their funds at the point they make an offer.

As a private individual selling your home, you are not a regulated party under these regulations. You do not have a legal obligation to carry out formal AML checks. However, asking basic questions about your buyer's deposit before accepting an offer is prudent and protects your interests.

What sellers should check and when

You do not need to become a financial investigator, but there are practical steps you should take to satisfy yourself that your buyer's deposit is genuine before you accept their offer and take your property off the market.

Before accepting an offer

1. Ask your estate agent for confirmation. Your agent should have already requested proof of deposit (along with the AIP) as part of their standard process. Ask them to confirm what they have seen and whether the numbers add up. If your agent has not checked, ask them to do so before you accept.
2. Check the arithmetic. AIP amount plus deposit should equal or exceed the offer price. If there is a shortfall, ask how the buyer plans to bridge the gap.
3. Ask about the deposit source. You are not prying — you are protecting your interests. Is the deposit from savings, a gift, an inheritance, or the sale of another property? Each source carries different risk levels and verification timelines.
4. If the deposit is gifted, check the letter is in hand. A buyer who says “my parents are helping with the deposit” but has not yet obtained a gifted deposit letter could face delays when the mortgage lender requests it during underwriting.

After accepting an offer

Once you have accepted an offer and solicitors are instructed, the formal verification of the deposit is handled by the professionals. Your buyer's solicitor will carry out the detailed source-of-funds checks, and the mortgage lender will require proof of deposit before issuing a full mortgage offer.

During this period, stay in contact with your estate agent for updates on the mortgage application progress. Key milestones to track include:

• Mortgage application submitted. The buyer should submit their full mortgage application within one to two weeks of offer acceptance.
• Property valuation completed. The lender will instruct a valuation survey, usually within two to three weeks.
• Full mortgage offer issued. This confirms the lender has approved both the buyer and the property, and is typically issued four to eight weeks after the application. At this point, the deposit has been formally verified.

If the full mortgage offer is delayed or the lender raises queries about the deposit, this is a sign that something may need resolving. Ask your agent to follow up with the buyer's broker or solicitor. For guidance on vetting buyers more broadly, see our guide on how to vet a buyer before accepting an offer.

Common deposit problems that affect sellers

Understanding the deposit-related issues that can derail a sale helps you spot warning signs early and take action before it is too late.

The deposit does not yet exist

Some buyers make offers with the intention of saving the remaining deposit during the conveyancing period. This is a significant risk. If the buyer has not accumulated the full deposit by the time the mortgage lender needs to see it, the lender will not issue a full offer and your sale stalls.

The deposit is tied up in an unsold property

A buyer who is relying on the proceeds of their own property sale for the deposit is creating a chain dependency. If their sale falls through or is delayed, your sale is directly affected. This does not mean you should reject such buyers outright, but you should be aware of the additional risk and check the progress of their sale regularly.

Gifted deposit without the paperwork

A buyer who has received or is expecting a gifted deposit but has not prepared the gifted deposit letter and supporting documentation will face delays during the mortgage application. Lenders are strict about gifted deposit requirements, and missing paperwork can hold up the full mortgage offer by weeks.

Deposit from an overseas source

Deposits originating from overseas bank accounts take longer to verify because the buyer's solicitor must carry out additional due diligence on the source of funds. Exchange rate fluctuations can also affect the deposit amount between the offer date and completion. If your buyer's deposit is coming from abroad, factor in extra time for verification and be aware that the final amount may vary.

Down-valuation reducing the buyer's purchasing power

If the lender's valuation comes in below the agreed purchase price, the buyer may need a larger deposit to make up the difference. For example, if you agreed a sale at £300,000 but the lender values the property at £285,000, the buyer suddenly needs an additional £15,000 in deposit funds. If they do not have this, the buyer may ask you to reduce the price or the sale may collapse entirely.

Proof of deposit vs proof of funds: understanding the difference

These terms are often used interchangeably, but they refer to different things:

For a cash buyer (no mortgage), proof of deposit and proof of funds are the same thing — the buyer must show they have the entire purchase price available. For a mortgage buyer, proof of funds is the combination of the AIP and proof of deposit.

Timing considerations

The timing of deposit verification matters because different checks happen at different stages of the transaction:

The key point is that basic proof of deposit should be established at the offer stage — before you commit. The detailed verification happens during conveyancing, but by then you are already invested in the sale. Checking early gives you the best chance of identifying problems before they cost you time and money.

Red flags to watch for

• Buyer cannot produce any deposit evidence. A buyer who is unable to show that their deposit exists at the offer stage is a serious risk. There is no legitimate reason for a prepared buyer to refuse this basic information.
• Deposit amount has changed since the offer. If the buyer initially said they had a 15% deposit but now mentions it is only 5%, the numbers may no longer work with their AIP.
• Vague explanation of deposit source. A buyer who cannot clearly explain where their deposit is coming from may face problems during the solicitor's source-of-funds checks.
• Gifted deposit with no letter or donor documentation. If the buyer says the deposit is a gift but has not prepared the necessary paperwork, expect delays.
• Deposit dependent on an event that has not happened. For example, a buyer waiting for a bonus payment, an inheritance that has not been distributed, or a property sale that has not yet exchanged. These introduce uncertainty into your sale.
• Large unexplained deposit shortly before the offer. Bank statements showing a sudden large credit without explanation could indicate a temporary transfer to inflate the apparent balance. The buyer's solicitor will investigate, but it is worth noting.

Sources

• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 — legislation.gov.uk
• Proceeds of Crime Act 2002 — legislation.gov.uk
• UK Finance — Mortgage lending statistics and deposit data
• Legal & General — Bank of Mum and Dad research
• Solicitors Regulation Authority — Anti-money laundering guidance
• HMRC — Anti-money laundering guidance for estate agency businesses
• National Crime Agency — Suspicious activity reports guidance
• Financial Conduct Authority — Mortgages and home finance

Related guides

• Selling to an Overseas Buyer

Frequently asked questions