Wed 05 Dec 2018

Buying A New Property Is Not Just The Purchase Price

Buying a home is obviously going to set you back the sale amount you agreed.  But what other costs are associated with purchasing a new property that you may not have factored in?  In order not to find yourself short on funds, take a look at the following things you are likely to need to budget for:

Mortgage Fees

If you are using a mortgage to pay for your property there are often mortgage fees attached to the product such as arrangement or valuation fees.  Valuation fees are normally around the £250 mark and are sometimes provided free as part of a particular mortgage product. Arrangement fees charged by the bank can be anywhere from £500 to £2000; again, occasionally you may be able to take a product where these are free of charge.  It is important to note however that the interest rate is likely to be higher on a no-fee mortgage product.  

You can add these fees onto your mortgage; if you are considering this, you must do your sums!  Work out how much interest you will be paying on the fee amount (potentially for years) vs paying for it upfront.

Surveyor Fees

There are many different options available to you when it comes to getting a survey done. Well, there are three main ones to pick from, all with varying benefits and of course costs.  Helpfully, we wrote a blog about each one of these in detail! Essentially, you need to factor in a minimum spend of £250 and a potential maximum of up to £1000.

Solicitors Fees

Solicitors provide a vital service as part of your home purchase, but their services don’t come cheap!  They will conduct searches on your property that are designed to alert you to potential no-deal situations.  For example, is a high-speed railway planned to come through your back garden, or are 1,000 new homes about to be built on the land to the back of you?  You can opt out of having some searches done, but most are fairly obligatory.  Searches are likely to cost you around £250.

Solicitors also deal with the totally necessary legal checks to ensure you are allowed to buy the property and the vendor is allowed to sell it to you!  You should budget between £1000 and £1500 for these.

Stamp Duty

Stamp duty is a tax you pay on purchasing a property.  The amount you pay depends on how much you are paying for the property.  It is important to note that first time buyers are exempt from stamp duty if buying a property at £300,000 or less.  If the property is up to £500,000, you will pay 5% on whatever amount remains over £300,000.

If you are not a first-time buyer, the following table applies, where the higher percentage is charged progressively with the price of the property:

Moving Costs

Once all of those costs have been paid, contracts have been signed and you’re ready to pick up your keys – you need to actually move in!  Moving costs can be as varied as your requirements – if you have a van and a lot of patience, all you might need to shell out is your fuel money.  It is more likely that you will want someone else to do the heavy lifting, and so professional mover costs will set you back around £400 - £1000.  This depends entirely on how much stuff you’re moving and if you have any particularly valuable belongings.