Loan agreement: person to person; property purchase

Use this document to lend money to family or friends for the purpose of helping to buy a house or flat, or for a renovation project.

The loan can optionally be secured on a guarantee by a third party.

Suitable for use in: England & Wales and Scotland
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About this document

Use this agreement to record a loan where the money will specifically be used to buy, renovate or refurbish a property. It can be used for lending to one or more people jointly.

Even when you trust the person to whom you are making the loan to repay you in full and on time, with such a large amount being lent, you should record the agreement in writing. By using this document, you should avoid confusion about whether the money was a gift or a loan, when the money should be repaid and with how much interest.

The agreement includes the option for a third party, such as another family member or a company to guarantee the debt.

It is suitable for situations such as:

  • lending to a family member and his or her partner to use as a deposit for a house or flat

  • lending to a family member to pay off a mortgage

  • lending to a friend for property renovations

Either party may be abroad or in the UK, and the loan can be of any size.


If you would prefer to use a simpler agreement, see this one, written for lending to friends and family members.

Unfortunately we are not able to sell a document that secures the debt against the property - such a charge is a restricted activity under law and requires a solicitor. Additionally, in many cases, doing so would break the terms of any mortgage agreement.

If the borrower has other assets, such as a share portfolio or possessions of value, you may like to use these as security instead.


  • Definition and purpose of the loan

  • Relationship and status of the borrowers

  • Borrowers' warranties

  • Sum of the loan and advances

  • Repayment conditions

  • Interest payable

  • Early repayment

  • Method of payment

  • Provisions covering default (non-repayment)

  • Assignment (transfer of obligations to repay)

  • Guarantor and guarantee

  • Miscellaneous legal matters


This document was written by a solicitor for Net Lawman. It complies with current English law.

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