What Is Proof of Funds?

Proof of funds is documentary evidence that you have the financial means to purchase a property. It is required by estate agents under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, which require agents to verify the source of funds used in property transactions. Beyond the legal requirement, proof of funds also gives sellers confidence that your offer is credible and that the sale is likely to proceed.

What Counts as Proof of Funds?

The documents required depend on the source of your funds:

• Cash buyers: recent bank statements (typically the last three months) showing the full purchase amount available
• Mortgage buyers: a mortgage agreement in principle plus bank statements showing the deposit
• Equity from a property sale: a letter from your solicitor confirming the expected net proceeds, or a memorandum of sale if your property is under offer
• Gifted deposit: a letter from the person gifting the funds confirming the amount and that it is a gift (not a loan), plus their bank statements
• Inheritance: a letter from the estate's solicitor or a copy of the grant of probate
• Savings: bank statements showing the funds building up over time

How Recent Must the Documents Be?

Bank statements are typically required to be dated within the last three months. If your funds are held in a savings account or investment account, statements from that account will be required. If the funds have recently been moved between accounts, you may need to provide statements from both accounts to show the trail of funds.

What If My Funds Come From Multiple Sources?

It is common for a buyer's funds to come from multiple sources — for example, savings plus equity from a property sale plus a gifted deposit. In this case, you will need to provide evidence for each source. The total of all sources should add up to at least the purchase price (for cash buyers) or the deposit amount (for mortgage buyers). Be prepared to explain any large or unusual deposits in your bank statements.

When Will You Be Asked for Proof of Funds?

Estate agents typically ask for proof of funds when you make an offer, or sometimes before arranging viewings. They are required to carry out these checks before they can formally accept your offer and mark the property as sold subject to contract. If you cannot provide satisfactory proof of funds, the agent may not be able to proceed with your offer regardless of the price.

Protecting Your Privacy

You are not required to show the full balance of your bank accounts — only the relevant funds. If your bank statements show a balance significantly higher than the purchase price, you can redact the portions that are not relevant. However, you must not redact information that is relevant to the transaction, and you should be transparent about the source of all funds being used for the purchase.

Preparing in Advance

Having your proof of funds documents ready before you start making offers will speed up the process and demonstrate to agents and sellers that you are a prepared and serious buyer. Gather your bank statements, mortgage agreement in principle, and any other relevant documents before you begin viewing properties. If your funds are complex — for example, involving multiple sources or recent large transfers — consider preparing a brief covering note explaining the position.