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The Costs Associated with Buying a House: A – Z

It can get overwhelming when you start to think of all the costs associated with buying a house, and it’s no surprise as you’ll only come across some of these costs, like stamp duty, a handful of times in your life.

To help you get prepared for the home buying process, we’ve put together a list of all the costs associated with buying a house. Upfront costs of buying a house are those you’ll pay before you get the keys to your new home.

Overview of costs associated with buying a house

Type of costRough price
DepositAt least 5% of the total property value
Mortgage costs£0 – £1475
Stamp dutyBetween 0 to 12% of the properties value
Conveyancing£750 – £1500
Other Upfront Fees£900 – £2025

Conveyancing fees 

Conveyancing is the legal process that you’ll be taken through by a conveyancer (a solicitor who specialises in property transactions). These fees are generally around £750 – £1500, and like many other fees, the specific details of your property purchase will cause this cost to vary.

A good conveyancer is vital as they’ll be the one you deal with the most once your offer on a new home has been accepted. If you’re looking for a reliable conveyancer, ask us for a quote.  

Deposit 

To start the home buying process, you’ll need to put down a deposit for a mortgage. Or at least have a plan to save up the money.

In the UK, you can borrow up to 95% of a property’s valuemeaning you’ll need at least a 5% deposit. For a £300,000 home, that’s a deposit of £15,000.

However, given the pandemic and cost of living crisis, mortgage lenders have become stricter with their lending rules, so it’s much more realistic to expect to pay 10% and 20% of the total property value.

Mortgage fees  

When a mortgage is set up, there are sometimes hidden costs or at least some you wouldn’t expect to pay. There are three main types:  

  • Valuation fee – £100- £1,500 (most homebuyers will pay £100 – £250, and some lenders might include this in their mortgage packages.) 
  • Arrangement fee – Average £975 (you might have the option to add this onto the mortgage.) 
  • Booking fee – £100 – £250 (only some lenders charge this) 

These are the average fees for a mortgage in the UK. For more accurate pricing, it’s always best to speak to a broker or chosen lender. Get in touch if you’d like support finding a broker or navigating mortgages.

Stamp duty

Depending on the value of the property you’re buying and what type of buyer you are, you’ll need to pay stamp duty. Stamp duty was first introduced by the government in 1694 to raise funds for the war; nowadays, it’s used by the government to help fund public services like the NHS. 

The good news is that if you’re a first-time buyer buying a home valued at less than £500,000, you qualify for stamp duty relief. This means you’ll pay less, or in some cases, no stamp duty. Check out the tables below for the current stamp duty rates. 

First-time buyers

Property ValueRate
Up to £300,0000%
£300,000 to £500,0005%
Source: gov.uk

All other buyers

Property ValueRate
up to £125,0000%
£125,001 to £250,0002%
£250,001 to £925,0005%
£925,001 to £1.5 million10%
£1.5 million and over12%
Source: gov.uk

Other Upfront Fees 

To round this off, here are some of the other fees you will need to think about when buying a home: 

  • Surveyor’s fees – £400 – £1,425 to hire a professional to visit the property you’re looking to buy to check for significant issues. The exact cost will depend on the size of the property and how in-depth the survey is. 
  • Broker fees – £0 – £250 to hire a broker to arrange a mortgage for you. This is a fee that you can easily avoid paying by shopping about for your broker. If you’re struggling to find a fee-free broker, reach out for help here.
  • Local searches – £200 – £300 for requesting information from various sources about the property, such as local developments, location of public drains and sewers, contamination and key information about local services.
  • Land & property registration fee – Average £300 to register the property in your name.

Feeling lost in the home buying process and want it to be easier? 
Join today and get a call from a homebuying expert who’ll give you all the support you need.

The Costs Associated with Buying a House: A – Z - Kotini
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