Buying a new home is exciting, whether you’re purchasing your first one or adding to your portfolio. But there are a few costs you’ll need to face before getting your hands on the keys. Our guide will help you understand the costs involved when buying a house so you know what to expect.
Key Takeaways
1. Deposit: You’ll need a deposit of at least 5% of the purchase price of the property. A larger deposit results in a lower Loan to Value (LTV).
2. Mortgage Costs: These include arrangement fees and mortgage broker fees. Some are paid upfront, while others can be added to your mortgage on completion.
3. Stamp Duty: As of July 1, 2021, Stamp Duty is waived for property purchases up to £250,000. The 5% rate applies to homes between £250,000 and £925,000.
4. Surveyor Fees: Survey costs vary based on property value. Consider RICS Condition reports, Home Condition Surveys, or comprehensive building surveys.
5. Legal Fees: Solicitor or conveyancer fees range from £500-£1,500, including VAT. Costs depend on purchase complexity, property type, and location.
6. Repairs: If buying a newly built home, repairs are minimal. For other properties, budget for potential DIY tasks upon moving in.
Deposit
The deposit is one of the most significant costs when buying a house. Lenders usually require between 10% and 15% of the property’s purchase price. The larger your deposit, the lower your Loan-to-Value (LTV) – the amount you're borrowing as a percentage of what your new property is worth (its current market value).
Read our tips on saving for your deposit to get started.
Solicitor fees
When buying a property, you’ll need a solicitor or licensed conveyancer to complete the legal side of the process. On average, legal fees are between £500 and £1,500, including VAT at 20%. The price varies depending on the complexity of the purchase, the type of property and your location.
In addition, your solicitor may charge around £250 for local searches, and you’ll need to pay between £90 and £140 to register your property with the Land Registry.
Our guide to conveyancing covers everything you need to know.
Mortgage fees
From arrangement fees to mortgage broker fees, there are several costs associated with getting a new mortgage or remortgaging a property. Some must be paid upfront, while others can be added to your mortgage on completion.
Explore our essential guide to mortgage fees for more information.
Stamp Duty
As of 1st July 2021, buyers don’t need to pay Stamp Duty on property purchases up to £250,000 (£425,000 for first-time buyers). The existing 5% rate applies when purchasing homes between £250,000 and £925,000.
Find out how much you’ll have to pay in our Stamp Duty guide.
Surveyor fees
Surveys vary in price and depend on the value of your property. For a typical property, a Royal Institution of Chartered Surveyors Condition Report costs around £400, a home condition survey costs around £500, and comprehensive building or full structural surveys cost over £600.
Find out more about the different types of house surveys in our guide.
Moving costs
The price you pay for moving your belongings into your new home can vary depending on whether you’re moving everything yourself, hiring a van, or using a removal company.
Distance is another factor to consider in your moving costs – moving within a few miles is considerably cheaper than moving across the country. If you plan to use a removal company, gather a few quotes and check availability on your moving date.
Council tax and bills
As soon as you move in, you’ll have to start paying council tax and utility bills. If your new home is a leasehold, you’ll pay ground rent of around £50-£100 a year and a service charge to the freeholder (your landlord).
Insurance
You need buildings insurance as a condition of your mortgage, but you’ll also want to get contents insurance. It’s best to arrange this before completion so that you know your belongings are covered from day one.
Explore the ins and outs of home insurance in our comprehensive guide.
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Discover fantastic homebuying offers for a trouble-free move, including Deposit Boost, Deposit Unlock and Parent Power.
Contact or visit our Sales Advisers today to learn more.
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