There are several basic costs involved in buying a house. The top 7 are listed below:
1. Deposit – You will need enough savings to pay the deposit at point of exchange. This is usually 10% of the property purchase price.
2. Mortgage fees – These fees include a booking fee, application fees, arrangement fees, valuation fees and broker fees. The list seems endless. Not all brokers and lenders charge all these fees, so it is well worth shopping around to find the best deal.
3. Property Lawyers’ Fees and Disbursements – Your property lawyer will charge a flat fee or a percentage of the property value for the work they carry out on the contract, searched, deeds and money transfers. They will also charge for disbursements. These are the fees incurred from the searches, checks, money transfers and stamp duty themselves and will be passed on the relevant body on your behalf.
4. Stamp Duty Land Tax / Land Transaction Tax – Although this is one of the disbursements, it is worth mentioning this cost as it can be a considerable percentage of your fees. If you are buying a house in England or Northern Island you will pay Stamp Duty Land Tax (SDLT). If you are buying in Wales, you will pay Land Transaction Tax. The amount you pay will depend on whether you are a first-time buyer, moving your own house or purchasing an additional property, also whether it is leasehold or freehold and whether you are purchasing the property as an individual or company. Calculators for both can be found on the website.
5. Surveyors Fees – It is vital that you get your property looked at by a surveyor. If you are getting a mortgage, the lender will instruct a valuation survey, but this will only look at the value of the property, not advise on the structural condition of the property or highlight any problems. If the survey finds considerable issues, you may want to re-negotiate the price. There are several different types of survey and it is worth checking with the surveyor which is required for the type of property you are buying.
6. Buildings and Contents Insurance – You are legally bound to purchase the property on the exchange takes place. Buildings insurance is a must to protect against damage from fire, floods, subsidence and anything else.
7. Removal Costs – Removal costs vary greatly depending on the type of service you would like. There are 4 options to consider:
- Hire a van a do it yourself
- Hiring a man and a van
- Removals only
- Removal & Packing Service
If you’d like to understand just how much it costs to buy a new home, then take a look at our FREE and easy to use calculator.