Buying a property is one of the biggest financial decisions you’ll ever make but the price on the listing is just the beginning.  

From deposits and legal fees, to surveys, stamp duty and removals, the true cost of buying a home can quickly add up.  

In this post, we’ll break down all the expenses you need to think about so you’re not caught off guard and can budget with confidence. 

Deposit: 

Your deposit will typically be between 5% to 20% of the property price. The larger your deposit, the more likely you are to secure a better rate on your mortgage and the more lenders you’ll have access to.  

There are a select few mortgage products that allow you to buy a property with a 0% deposit but they have very specific criteria when deciding who will be accepted.  

Conveyancing: 

Conveyancing fees vary depending on the house price, whether the property is freehold or leasehold and whether any additional extras are required (also known as disbursements).  

This can include additional charges for using a LISA to purchase a property, buying a shared ownership property and even the fees to transfer large sums of money by bank transfer. 

Your legal fees cover the conveyancing service, property searches, ID checks, transferring of ownership of the property and more. Always get a quote and check for transparent pricing making sure every cost is broken down. 

Get a full, transparent conveyancing quote here. 

Stamp Duty Land Tax:

When buying a residential property in England and Wales, you may also need to pay Stamp Duty Land Tax (SDLT). First time buyers are exempt when purchasing a property below £300,000. 

You can check the latest rates on the government website. 

SDLT is due within 14 days of completion. 

Survey: 

A survey will produce a report of the condition of the property you’re buying, both internal and external. You can book three different levels of survey, depending on the age, condition, size and features of the property. 

The fee depends on the level of survey booked, with the most in-depth survey costing the most. The average cost of a survey is between £400 and £1,500. 

Land Registry:

You’ll also need to pay a fee to Land Registry which is dependent on the value of the property you’re buying and whether you apply online or via post. Your conveyancer will usually pay the land registry fees on your behalf, as a disbursement, meaning you’ll pay this back to your conveyancer rather than directly to Land Registry. 

Mortgage broker: 

Most mortgage brokers charge a fee for their services. Some charge a percentage of the mortgage amount, others a flat fee and some charge hourly rates or a combination of all three. 

Understand when fees are due and how they charge so you’re able to budget. 

While a mortgage broker may charge fees, remember they may also save you money in the long run by finding you the best mortgage deal. An itemised breakdown will help. 

Valuation:

When you buy a property with a mortgage, your lender will carry out a valuation of your property to ensure it’s been valued correctly and its true value is sufficient to secure the mortgage. The fee varies depending on the lender, property size and value.  

Some lenders may include the fee in the mortgage package.  

A mortgage valuation isn’t the same as a survey, which is an inspection of the property’s condition. 

Mortgage arrangement: 

A fee charged by your mortgage lender to set up the mortgage. Don’t have the cash upfront? The arrangement fee can often be added to your loan to spread the cost but this means you’ll pay interest on the fee. 

Buildings insurance:

Most mortgage lenders will require you to have insurance in place from the day you exchange on the property, so it’s best to do your research and get this arranged in advance.  

There are specialist companies that offer short term buildings insurance to ensure you’re covered between exchange and completion. 

Moving: 

Whether you do it all yourself or hire a company to help, you’ll likely need to account for moving costs.  

When using a removal company, the cost will depend on: 

• The company 

• The size of property you’re moving from/to 

• The distance you’re moving 

• Whether you need any furniture dismantling and/or re-assembling 

• Whether you add on a packing or unpacking service 

If you decide to move everything yourself and hire a van, you’ll need to factor in: 

• The van rental 

• Petrol or diesel 

• Insurance add-ons 

• Boxes, tape and other packaging materials to keep valuables safe 

Bank transfer fees: 

Paying large sums of money on the same day typically incurs an additional fee. A telegraphic transfer ensures funds reach an account on a certain date, ensuring no delays or issues with your property purchase. Each separate transfer incurs a separate fee, typically between £20 and £30 each. 

Want help budgeting for your house move?  

Book an initial consultation with the financial experts at Ernest Grant mortgages to get complete financial clarity, ready for your property purchase.