Understanding the True Cost of Buying Your First Home
Wondering how much you’ll need to buy your first house or flat?
Bear in mind it’s not only the upfront costs you need to consider – but ongoing ones as well. From solicitors to bills, there’s a lot to get your head around.
For, some understanding the true cost of buying a home can be tougher than expected. But, it’s extremely important.
Let’s put a stop the guessing games once and for all. After all, to get on the property ladder, you need to understand it! Time for a handy breakdown.
Deposit
First things first – saving for a deposit is a vital step. We all start somewhere!
This can be anywhere between 5-20% of the sale price of a property. You’re advised to save as much as you can initially, as this can make the mortgage options open to you more attractive.
Some tips for helping you save include:
- Moving back in with family
- Budgeting
- Using help from the government
- Finding cheaper rented accommodation
Mortgage lender fees
A mortgage valuation will determine how much a lender is willing to loan you. However, this costs money.
The cost varies depending on your individual situation and the property you’re looking to buy. In some cases, you won’t be charged at all. However, usually, the cost can be anything from £100-£1,500.
Other fees include a mortgage booking and an arrangement fee.
We can help you connect with an adviser who will supply you with a free mortgage quote. Get yours below.
Survey fees
Note: a mortgage valuation is not the same as a survey. This is about protecting the safety of the loan, not looking at the structural stability of a property.
In order to potentially save yourself money in the long-term, it’s vital you contact a surveyor. They’ll be able to identify any potential problems with a property, such as subsidence. This may encourage you to look elsewhere, or give you leverage to negotiate a house price down.
However, while it’s a necessity, it’s one that will cost you. Prices vary depending on what survey you get. A full structural survey, for example, can be around £600.
We can help you find property survey quotes for free.
Stamp duty
Stamp duty land tax (SDLT) is one of the upfront costs some first time buyers have to deal with. It’s between 2-12% of the property sale price.
However, first time buyers only pay on properties costing £300,000 or more. The amount of SDLT you pay depends entirely on the price.
Use a stamp duty calculator to find out exactly how much you’ll be paying.
Solicitor costs
The right legal advice when buying a house is essential for a smooth sale. A solicitor will take on a number of vital roles, such as dealing with the important paperwork and setting a date for completion.
The cost can be anything up to £1,500. If they run local searches, this is an extra cost on top of that, sometimes up to £400.
Find conveyancing quotes for free below.
Removal costs
Without a professional firm, your belongings may not be insured while in transit. Plus, it’s essential for peace of mind.
However, it will cost you – around £300-£500.
We can help you get a removal quote for free – no matter how big or small your move is.
Maintenance
Your survey may have highlighted any areas that need your attention as soon as you move in. The cost of these can vary depending on the severity.
Even if your home doesn’t need any immediate work, maintenance is an ongoing cost that you need to factor in when planning to buy a house.
Decoration costs
It’s likely you’ll want to make a few changes to your property, unless it’s a new build.
But, putting your own mark on the place will cost money. If the seller didn’t leave many fixtures and fittings behind, you may have to pay for refurbishing the property to a certain extent.
If it’s an old building, the walls might need a new lick of paint or two.
Depending on how handy you are with a paintbrush, you could do the decorating yourself to save money.
Insurance
Those who haven’t owned their own property before aren’t likely to be too familiar with insurance.
However, buildings insurance will likely be a requirement of your mortgage lender.
To keep your home secure, it’s recommended to get contents insurance too – as this will keep your belongings protected!
Council tax
How much council tax you pay will depend on where you live and the property valuation.
Bills
From water to gas, there are a number of utility bills you’ll be paying on an ongoing basis! First time buyers should get their head around these early to avoid a nasty surprise later on.
Always make sure to compare and switch energy providers to avoid paying more than you should.
Leaseholder costs
Is your property freehold or leasehold? If it’s the latter, you’ll have to pay ground rent to the leaseholder every year.
The price varies – and sometimes increases on an annual basis.
Need help moving home?
Money isn’t the only thing you need to get your head around when buying a home for the first time. The world of property can feel like a minefield!
Luckily, we’re here to offer a helping hand, as part of our mission to lower the age of first time buyers.
We’re here to guide you through your journey – from start to finish. Find more help for first time buyers here.
One essential tip to remember is that you can change many things about a house, but not its area. So, make sure you’d be happy living there. A property report can collect location-specific details, such as crime rates and local schools, before you buy. Get yours below.
Last Updated: September 22nd, 2024
