7 additional costs to consider when buying your new home and how best to budget for these.

April 10, 2024

What costs are there to consider when buying a new home

What do you need to budget for when buying a property?

You are ready to take that next step to getting on the property ladder and you have saved up for that big deposit. however, have budgeted for the additional costs that come with buying your first home? if not, don’t panic. Below are 7 tips on how best to budget for buying a new home:

Solicitor Fees:  When buying a property, you will need to appoint a conveyancing solicitor to carry out all the legal paperwork. This is a multi-based process where the solicitor will conduct searches on the building, local authority and fraud checks so that a property can legally be transferred to you. The cost of appointing a solicitor can vary, however, you will need to factor in the cost of the solicitor and disbursements, and we recommend budgeting £2000 to £2500 for these costs.

Mortgage Fees: Another cost that you should consider is mortgage fees and these costs can vary based on your personal situation and the mortgage product you are applying for. Most mortgage providers will charge for an ‘arrangement’ fee for setting up the mortgage deal and you should budget £1,000 for this fee.

Stamp Duty Land Tax: Depending on whether you are a first-time buyer and the price of your new home you will most likely need to pay for stamp duty. Your Solicitor will assist with this and manage the transaction on your behalf. These costs can vary from 5% to 12% of the purchase price, for example, if you were buying a property for £300,000 you would look to pay 5% towards stamp duty which we equate to £2,500.

Valuation Fees: Most lenders will require a valuation of the property to see how much the it is worth and this could be different to the purchase price. They do this for security purposes, and you should expect this to cost an additional £300.

Broker Fees: If you are using a Broker then you can expect an additional fee for this, and these fees can vary from a one-off payment of £300 for their services to paying £1,000 per £100,000 of the purchase price. These prices vary due to some brokers receiving commission from the lenders directly and may only charger a one-off payment for their services.

Land Registry: Once you have purchased the property you will need to register the property under your name and transfer this from the previous owners. Land Registry charge a fee to do this, and it can vary depending on the overall value.  Houses sold for between £100,001 and £200,000 will cost around £200 compared to properties that cost £200,001 and £500,000 which will cost roughly £300 in total. These are additional fees that will be arranged by your solicitor.

Surveys: Although it isn’t mandatory to have a survey completed on your new home, we would always recommend having your property inspected. A survey highlights if there is damp in the property, any structural issues, plumbing problems, and any potential snags within the property. We recommend that you look for a RICS approved Surveyor to carry our your survey and opt for a Level 2 HomeBuyer Survey or higher as these surveys will highlight any immediate concerns with the property.  The costs of these can vary from £450 upwards.

If you are looking to purchase a property and would like to know more, please contact us and we would be happy to help with your query.


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