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10 Essential Costs to Keep in Mind when Buying a Home in the UK

From Stamp Duty to Survey Fees: Understanding the Expenses of UK Homeownership


Buying a home can come with a number of hidden costs on top of the purchase price. Here are some hidden costs you need to be aware of when buying a home in the UK:


1. Stamp Duty Land Tax (SDLT)


This is a tax on land and property transactions and is payable on properties over a certain value. The amount you pay will depend on the purchase price of the property and whether you've owner a property before.


Tip:

Click here to calculate the amount stamp duty you'll need to pay.


2. Valuation and survey fees


Before you buy a property, it's recommended that you arrange a survey to be carried out. The cost of this will depend on the type of survey you need and the value of the property. Surveys typically costs between £500-£1,000 and this generally relates to a property's purchase price.


Tip:

Read the section titled "Get A Homebuyer's Report or Building Survey" to understand whether a 'Home Buyers Report' or 'Building Survey' is right for you.


3. Legal fees


You will need to pay legal fees to your solicitor or conveyancer for handling the legal aspects of the purchase. This will include them arranging local authority searches, legal contracts, tax compliance, and the transfer of ownership in your name via Land Registry.


Tips:

  • Legal fees should be relative to the value of the property

  • It isn't essential that the legally adviser you hire is located close to where you're buying the property

  • Many property lawyers will also have a reduced fee in case the purchase of the property falls through which is very common - make sure you discuss this before officially hiring a solicitor or conveyancer

4. Mortgage fees


If you're taking out a mortgage, you may need to pay arrangement fees, valuation fees, and booking fees. Early repayment charges and limits should also be assessed if you are taking out a fixed-rate mortgage, but these only apply if you repay the mortgage early. Make sure you understand all the fees that apply or may need to be paid before taking out a mortgage.


Tips:

  • It's also definitely worth getting a 'mortgage Agreement in Principle' before you start house hunting so that you know what your ultimate budget is

  • Make sure your mortgage adviser explains the fees involved and how they will impact you based on different scenarios

  • Our Free Report and Premium Report share with you the details of our recommended mortgage broker which has no up-front fees and will provide a free quote

5. Removal costs


Once you've completed on the purchase of the property, you'll need to move in. This may involve paying for a removal company, van hire, or storage costs. Removals companies usually cost anywhere from £600–£2,000 and this depends on the services included (e.g. it costs more if you require packing and handling of oversized objects). If you do it alone, expect to pay to pay between £50–£200 for packaging and for £60-200 for van hire.


Make sure you don't wait until move-in day to meet the removals company for the first time. You should organise a removals survey ahead of time to agree everything upfront with the removals company and get the costs, timing and services provided in writing.


Tip:

Social media and sites like Facebook Marketplace and Gumtree are a great way to find old boxes and packaging and sell/give away unwanted items which will lessen the load too!!


6. Repair and maintenance costs


Depending on the condition of the property you're buying, you may need to carry out repairs and maintenance work before you can move in. This can include things like redecorating, fixing leaks, or replacing appliances.


Tip:

Try and spend some time in the property ahead of move-in date to estimate the work that you'll want doing. Get quotes from tradespeople and have them ready to go after you complete to save time and panic.


7. Service Charges, Ground Rent, Cladding, Extending a Leasehold (only applicable to those buying a flat/apartment)


When buying a flat, make sure you are aware of whether the following will apply, how much they will cost, how they could vary and how often you'll need to pay them:

  • Ground rent

  • Service charges

  • Administration charges (or management fees)

  • New build properties may also ask for estate management charges

Tip:

Click here to for more details on

  • Leaseholders Tenure

  • Leaseholder Fees

  • Cladding issues

8. Council Tax


When living in a property there will be Council tax due. You can determine the payment date and frequency with your local Council. The exact amount you pay will depend on the local Council tax band your property is in.


Tips:

  • Click here to see the UK government's criteria for whether or not you are eligible for a Council Tax discount

  • Look up your Council tax band our Free Report

  • It may be possible to challenge your Council tax band - click here for more information

9. Building & Contents Insurance


Whilst it isn't mandatory, it is advisable to take out building insurance. You should take this insurance out to begin on the date you 'exchange contracts'. If the property sustains any damage after you’ve exchanged contracts i.e. before you have legally taken possession of the property, but have committed to doing so, it is still your responsibility, which is why you should be properly insured.


10. Future Expenses to be Aware of


Of course you may need to buy new furniture and fittings for your new home, such as carpets, curtains, and appliances, however, these are down to personal preference. What we can't do without is hot water, heating and lighting.


Make sure you are clear about

  1. The boiler i.e. how old is it, when does the warranty expire, and does it have a full service history in-line with the warranty? Make sure you have budgeted for replacing the boiler especially if that date could come soon. Note that the UK government will require all new builds to stop using gas boilers from 2025, but all existing properties aren't impacted.

  2. The property's electrical wiring - according to Property Insider "poor or old wiring is the most expensive home repair, potentially costing British homeowners a hefty £3,000 to £6,500".

  3. The state of roofing, built-in appliances and possible damp issues should all be considered and make sure these are addressed by whoever is writing your Building Survey/HomeBuyer Report.

By keeping these essential costs in mind and being financially prepared, you can ensure a smoother home buying process and move into your new home with confidence.

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