How Much Does It ACTUALLY Cost to Buy a Home?

Solicitor’s fees, mortgage fees, stamp duty and other costs can add up when buying a property. Today we will be explaining all the additional fees involved in a house or flat purchase, so that you are completely prepared for your next adventure.

Buying a home is not as simple as paying the asking price. There are always additional costs. It is sensible to keep around 15% of the value of your new property aside for additional buying costs.

From the legal services to mortgage fees, removals, and stamp duty, we want to share the fees involved with moving.

Here is a snapshot of the typical costs you will encounter when purchasing your new home:

Type of CostEstimated Cost
Conveyancer/ Solicitor’s Fees£2,000
Mortgage Arrangement Fees£1,000 to £2,000
Mortgage Booking Fee£100 to £200
Valuation Fee£150 to £800
Property Survey£400 to £1,500
Removals£150 to £2,000
Stamp Duty0% to 12% of home value
The average costs when purchasing a property.

Solicitors Fees

Allow £2,000

Solicitor’s fees are one of the biggest extra costs when buying a home. But they are absolutely worth the money.

Many people hire a solicitor to handle the legal aspects of buying a home, also known as conveyancing.

Fees may vary but allow up to £2,000 to be on the safe side. Make sure that you get a quote upfront before any work begins too, so you are certain of the costs that will be incurred.

Some solicitors may charge by the hour, while others may charge a set amount. They may even calculate the fee based on a percentage of the property you are buying.

So, what are the fees buying you?

Conveyancing

This usually includes:

  • The drawing up of contracts between you and the seller of the property.
  • Organising your stamp duty payment.
  • The payment transfer for your new property.

Searches

Your solicitor will also commission your local authority searches. This includes checking for things like flooding risk, if the property is near a contaminated area or if there are any plans for new road developments that could cause disruptions.

Search costs are usually included in the solicitor’s fee. But if not, they should be around £200 to £300.

Land Registry Documents

As part of the conveyancing process, your solicitor will also check the details of the previous owner, confirm the property boundaries and if the home sits on any public rights of way.

They will also handle the deeds to your home. This means that they will register the property in your name.

Mortgage Fees

Mortgage Booking FeesAllow £100 to £200

Some banks or building societies charge you a “booking” fee for your mortgage.

This is a fee that you must pay as soon as you agree to take out your mortgage loan. It essentially means that you have reserved your mortgage deal while your home purchase goes through.

A mortgage booking fee is also known as an application or reservation fee. It is non-refundable, meaning if your property purchase falls through you will not get the money back.

Mortgage Arrangement FeeAllow £1,000 to £2,000

When a bank or building society agrees to give you a mortgage, they are likely to charge you a fee to set it up.

The cost of a mortgage arrangement can vary depending on the type of mortgage, the value of it and the rate of interest that you agree to pay.

You could be charged up to £2,000 to arrange your mortgage, although the average is around £1,000.

If you do not have a spare couple of thousand pounds, an agreement fee can be added on to what you are borrowing. However, keep in mind that you will have to pay interest on it.

Often deals with the lowest interest rates have the highest fees attached.

The low rates are designed to catch your eye, but you can work out the true value of the loan by comparing the fee, interest rate and length of the deal.

Valuation Fees

Allow £150 to £800

When you apply for a mortgage, your lender will need to value the home you want to buy to ensure that it is worth what you want to pay for it.

Not all lenders charge for a valuation as they are sometimes included in your mortgage deal.

If you do need to pay, the cost will vary depending on the value of the property you are buying. On a £300,000 home for example, a typical cost will be around £200.

Occasionally, you may need a valuation conducted by an RICS Surveyor, for Help to Buy properties for example. That may cost between £150 to £800. At Boxall Brown & Jones we have friendly RICS Accredited Surveyors who will be more than happy to provide you a quote. Just call 01332 292825.

Survey CostsAllow £400 to £1,500

Before you buy any home, it is always a good idea to have a survey done on your desired property.

A survey could end up saving you thousands in the long run. Or stop you from making a big mistake if it uncovers a lot of problems.

There are three main types of survey to choose from when purchasing a property. And depending on which one you select; the costs can range from £400 to £1,500.

Level 1 Survey: A Condition Report (£400 to £950)

A Condition Report is a basic survey that provides an overview of the property’s overall condition. It reports any big issues but does not go into great lengths of detail.

Level 2 Survey: A HomeBuyer Report (£400 to £1,000)

A HomeBuyer Report is suitable for most modern conventional properties that are in a reasonable condition, they are usually less than 50 years old.

Level 3 Survey: A Building Survey (£600 to £1,500)

A Building Survey is the most comprehensive survey that is available and provides an in-depth inspection of the property.

This is particularly useful for older homes, as they are more expensive but could well be worth the cost.

Stamp Duty Costs

Allow 0% to 12% of the Property Price

Stamp duty is a tax charged by HMRC when you purchase a property, flat or land in England and Northern Ireland.

The amount of tax you will need to pay depends on the price of the property. It is worked out as a percentage and that percentage increases as the price of the property goes up.

Any property or land that is under £125,000 is exempt.

For first-time buyers, the first £300,000 of the property they are buying is exempt. However, if the property is worth more than £500,000 then a first-time buyer must pay the normal rates.

Stamp duty rates apply to the amount that the property price falls within each tax band, as shown below.

Property PriceStamp Duty Rate
£0 – £125,0000%
£125,001 – £250,0002%
£250,001 – £925,0005%
£925,001 – £1,500,00010%
£1,500,001 and over12%
The current stamp duty rate in England.

Removal Costs

Allow £150 to £2,000+

Moving your belongings yourself might save you money, but it can also be very stressful.

You can hire a van from £10 an hour but it is going to take a few trips to empty a whole house or flat.

If you are doing it yourself, allow at least a full day of van hire to transport your items. Make sure that you factor in the cost of boxes and packing tape.

If you pack up your things yourself and ask a removals company to move them all, the average cost is £1,200 for a three-bedroom house.

If you are looking to receive a complete package, removal firms do conduct a luxe package where they will pack and unpack for you. However, be prepared to part with a few thousand for this one.

If you do go down the route of using a removal company, try and declutter before you get an estimate from them. It could save you quite a lot of money.

Do Not Forget the Deposit!

Allow 5 – 10% of the property purchase price

This is not strictly a moving cost; it is part of the cost of your new home.

But this is a reminder since you are doing the sums that the smallest deposit needed to buy a property is 5% of the home’s total cost.

So, if you are looking for a two-bedroom apartment that is £250,000, you will need £12,500 saved up in your bank for the deposit.

Most lenders prefer a 10% deposit if you can manage it. That way, it opens up more mortgage choices and potentially lower interest repayments for you.

The Government also offer schemes for first-time buyers that mean you do not need such a big deposit for example, Shared Ownership and Help to Buy.

We hope that this blog post helped you understand the costs of buying a property! Why not download our free checklists today to make your next property purchase stress-free?

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