How to pass the source of funds verification when buying a house after ILR?

A buyer has committed £25,000 to a property purchase transaction, yet the bank statements on file reveal that just five months prior to completion, the account balance stood at a mere £500. A review of the documents reveals a lack of evidence explaining how these funds were accumulated. This is an enforcement case disclosed in a thematic report published by the Solicitors Regulation Authority (SRA) on 5 November 2025; the regulatory conclusion addresses inadequate checks and does not constitute a finding that the buyer's funds are illicit.

Below, we will walk through the document preparation process following the residential property transaction procedures in England and Wales.

When entrusting, first clarify the breakdown of this sum of money.

Even if you hold ILR (UK permanent residency), you are still subject to source of funds checks when purchasing a property. When instructing a conveyancing solicitor, break down the purchase funds into categories such as mortgage, personal savings, and proceeds from a property sale, specifying the respective amounts, currencies, and bank accounts for each. The Source of Funds must explain how the money used for this transaction was acquired. An SRA thematic report also highlights an easily overlooked detail: law firms may charge clients for due diligence, but these fees must be clearly set out in the terms of engagement. When requesting a quote, be sure to confirm whether these checks incur any additional fees.

My assessment is that those whose funds have passed through multiple accounts should first ensure all transfer records are complete before arranging payment to the law firm; making an extra round of transfers just to tidy up the transaction flow is simply not worth it.

Wages and proceeds from the sale of a house: the supporting documentation for each has its own specific focus.

The evidence can be organized according to the SRA Q&A categories. For salary savings, provide payslips, P60s, and other income documents, along with bank statements showing salary deposits and transfers into savings; for proceeds from the sale of a property, provide completion statements, transfer of title documents, or other proof of sale, followed by records of the sale proceeds being credited to the account; for inheritance proceeds, provide the will, probate documents, or confirmation documents from the acting solicitor, matched to the beneficiary's receipt records. For each set of documents, clearly indicate the "Amount used for this property purchase" and match the relevant deposit entries with the corresponding document reference numbers. If there is a discrepancy between the agreed sale price and the actual amount received, use the completion statement to explain deductions such as mortgage repayments and transaction fees, to facilitate the caseworker's verification of the amounts.

These are the starting points for compilation; the required scope remains to be confirmed by the handling lawyer based on transaction risks.

After a few turns, just connect the path.

Once you have obtained the UK bank statements, you must also trace the records of the funds prior to their entry into this account. The SRA Q&A explicitly states that funds originating from a UK bank cannot be deemed to have a legitimate source solely on this basis. Proof of Funds demonstrates whether the funds are sufficient, whereas Source of Funds explains how the funds were acquired. If the funds have passed through overseas accounts, currency exchanges, and the UK receiving account, I recommend providing the transfer-out statements, currency exchange receipts, and deposit records in sequence, ensuring that the name, date, currency, and amount correspond item by item.

For transfers between your own accounts, records must also be retained on both ends; any amount discrepancies caused by fees and exchange rates can be itemized and explained separately.

I'm missing a page from my old bank statement. How can I get a replacement?

When submitting supplementary documents, you may ask your lawyer to specify exactly what is missing: is it a proof of income, or the upstream records for a particular transfer? If an old account has been closed, you can request historical bank statements from the original bank; if property sale documents are incomplete, you can contact the original handling agent to obtain supplementary transaction or settlement records. You should confirm with your current handling lawyer whether alternative documents are acceptable. For Chinese documents, it is also advisable to clarify the translation requirements first: the SRA Q&A states that foreign-language documents may require translation and notarization, meaning not every single bank statement needs to be processed. Provide complete and clear documents, along with an explanatory cover page, to facilitate the cross-referencing of materials.

An explanatory page can account for omissions but cannot substitute for missing supporting documents; when documents are temporarily unavailable, promptly explain the reasons and the progress in obtaining replacements.

Before the exchange of contracts, confirm the progress of the verification.

Prior to the exchange of contracts, it is advisable to confirm in writing whether the funds check has been completed, which documents are still outstanding, and from which account the funds will be paid. Section 18 of the UK Government's "Home Buying Guide" warns that once contracts are exchanged, the transaction becomes legally binding, and withdrawing may result in the loss of the deposit and liability for damages. If there is a change in the funder or the source of funds close to the payment date, you must promptly inform your solicitor; an SRA thematic report requires verifying whether the funds actually received are consistent with the previously submitted documentation, and any changes may necessitate further checks.

This article is for informational purposes only. For specific matters, please consult a licensed attorney.

One of the verification issues listed in the SRA special report is: "Do the documents provided match the explanation given?"

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