Trying to buy a house with savings - money laundering regulations

[Touty]

I am trying to buy a small modest house with my cash savings which are my life savings. I’m having problems with solicitors who want to know the origin of the money and this has to be demonstrated with bank statements. How is it possible to look that far back? I don’t know what the solution to this is.

You could contact the bank and ask how far back they can provide statements?

Or you could ask your solicitors what kind of evidence they want, do they need every statement going back 20 years?

You provide the statements showing where the money has come from- savings (monthly transfer from another account), inheritance, etc.

Might they accept your P60s from when you earned those savings

They said they want to see money being earned and savings accumulated. I asked the bank said they only go back 5 years

Do you have a savings account? Then that's what you show - regular payments going in there. And the evidence supported by an equivalent amount leaving your current account that your salary gets paid into.

thats Interesting. Is your cash in old money? Some old some new? Were you paid in cash for your work? It should still be easy to account for cash

a lot of it is in old money earned say 15 years ago. Some of it’s new money. No I was not paid in cash

But what account has it been in? If it's a new account they're going to want to know how that money was accumulated.

It’s in a savings account but most of it was accumulated over the last ten to 15 years

I bought a house for cash in 2017, I didn’t have any issues with solicitors, I signed a declaration stating that I had inherited the money but no proof was requested.
the solicitors only did the conveyancing.
can you not sign to say that it is money you have saved from your regular salary?

Unless I share this with you, I'll never know if it helps either way...back in 2010 I sold a house. The buyer was using a significant amount of "cash" (money in her bank) to pay for it. Her mortgage was small.

Her solicitor wanted to trace it back further than ten years, but my buyer took massive exception to this, as her money had been given to her by her mother, who lived in another part of the world, and my buyer was of the opinion that it was very personal & all to do with her nationality. Also, as I was told by the estate agent, it can be very hard to trace money in some countries, due to their processes (whatever they may or may not be)

Anyway, such was her unhappiness, she decided the change solicitors, which didn't delay things half as much as we feared, and however she did it, no further questions were asked about her money. Again based on what we were told by the estate agent, it came down to solicitor discretion, so you may wish to phone around other solicitors ask ask if they can take you on, if you are finding this one difficult.

Several years later, a friend of mine bought a house "cash", having sold hers some time earlier & rented for about 18 months. Although there was no issue with anything, I recall it took a lot longer to go through than I ever thought it would for a sale with no mortgage or surveys etc. HTH.

Solicitors are under a lot of regulatory pressure regarding potential money laundering. Because of that any transaction involving cash or investments may trigger inquiries as to where the money comes from.

I would explain, as you have here, that it's 'life savings' accumulated over many years and ask them to tell you what proof will satisfy them.

I think you're misunderstanding the issue. OP doesnt have a stash of literal cash in her house of old bank notes, she has savings, in an account.

Can you be more specific than "my savings"? Did all of your savings come from your salary? Are there any inheritance/gifts/other earnings etc in there? If it's literally all from your salary then, as a PP has said, you need to show that the money is in a savings account and that the amount is slowly increasing over time.

When I bought my first house I had a deposit that I'd saved for over 20 years and I just tried to be as specific as possible e.g. "£Xk was saved up over time from my salary, £Yk was from a grandparents' will, £Zk in premium bonds" etc.

I bought my house last year. Deposit was 75% and rest a small mortgage. My deposit was made up of inheritance from my mum, my previous house sale and savings.

they went through my account and my dads. He was transferring the money to me as a gift as he inherited it from my mums probate. It was set in her will that I would get a set amount if she died first. All legal.

but took months as that had to go through my dads account and wanted access to my mums account that was frozen. They both were good investors and had wealth reports so was easy to see, but needed to go through it. It was long and frustrating as they were requesting to speak to my mum even though I told them she had died.

eventually I got angry when they said the 6 month limit on documents had expired and they needed fresh evidence. Turned out it was the legal admin that was checking against a set criteria. I asked to speak to the solicitor who was in charge of my case. She was very pragmatic when I explained and signed off in a day.

understands they have to do it. But there has to be an easier way.

I work for a solicitor and the AML checks are taking up a ridiculous amount of my time. It's an absolute nightmare and the people at the Solicitors Regulation Authority need to spend time in our offices to see how impossible their requirements are.

Did you not receive regular statements from your bank/building society for your savings account?

I think it has ramped up in the last few years as we gave one child a deposit a few years ago and I don't remember any problems, but did the same last year and had to go through so many hoops; bank statements going back years, and then the actual amount we had to show it being transferred to us through solicitors letters, and in to our account, then we transferred it to another... complete pain although understandable, and really delayed the sale.

Send them what you have.

You can download pdfs of the statements and attach them to an email.

It will show the savings account going up over 5 years.

I think if you can show you've had the accounts for 5+ years, that demonstrates it comes from savings?

I'd be in the same boat. I have significant savings, saved over a lifetime, but currently being spent, as I am partially retired.

Not too clear here.

do you have payslips, tax records showing how much you earned?

you need to show paperwork of how that amount was accumulated over the years. Are we talking £150k/ £200k or even just £15k will need to be checked for its source.

i had to send invoices, showing account money paid in, where it was kept, tax returns, yes, the whole lot, and was not delayed in any way.

speak to the solicitors, this is a common situation, they won't need 20 years of statements, don't worry. Can you show regular payments into it from the last year or two? Or something from your bank could work, to say the account has been open x number of years and balance steadily increasing in that time etc

What is the answer when savings were accumulated a long time ago?

Your solicitor it checking to ensure your funds do not derive from the proceeds of crime, that's what they are looking for. So if you have saved regularly from your current acc to a savings account, provide statements for both accounts. This will show salary paid into your current acc, funds are then moved to your savings account and accumulated over time. Ask them how many years worth if statements they need, 6 years is the max. BTW - I work in financial crime.

If you have 5 years worth of bank statements that you show getting a monthly salary every month, and a savings account that gradually increases, I would expect that to satisfy it.