Buying a house is probably the most expensive purchase any of us will ever make, so it is important that you understand the costs associated with buying a property to avoid any nasty surprises.
While the mortgage is the biggest outlay in the house buying process, there are lots of other costs that really add up. We will try to help you understand these, so that you know exactly what to expect. Be sure to do your own research to ensure you know what is involved in your particular property purchase.
Reasearch shows that in 2019, the average cost of moving house is around £9000 taking into consideration all the fees involved, so you need to make sure you know how much you need to allocate for each of these. The following guide will hopefully help a little.
Some lenders charge a booking fee when you apply for a mortgage. This is not all lenders so it may not apply to you, but you should allocate this just incase. This is around £99 but can be higher.
Arrangement fees or completion fees as they are sometimes called are next. These are an administration charge made by the lender for arranging the mortgage. These can vary with an average of around £1000. There is usually an option to pay this upfront, or you can add it to the mortgage, but if you do this, you will pay interest on this so it will end up costing you a lot more over the long term.
You could use a broker to find you the best mortgage who will search the market to find you the best deal. We would advise using a fee charging independent financial advisor, because if you use a financial advisor that gets paid commission by a lender, you may find that they sell you the mortgage that makes them the most commission rather than the mortgage that is right for you.
Mortgage lenders require a valuation to offer a mortgage. The fee for this can vary and typically can be anywhere from £150 to £1500. Usually 10% of the fee is used to pay for the homebuyers report where the condition of the property is inspected and recorded.
A building survey is also required on many properties, generally older ones or properties where rennovation is required. The costs for this is usually between £500-£1000. This provided a detailed report on the condition of the property and the structure.
You will also need a solicitor or a conveyancer to carry out all of the legal work when buying or selling a property. Legal fees are generally between £700-£1500. The ownership of the property has to be recorded so a land title can be created which is guaranteed by the government. This records the property details and land boundries. The solicitor will carry out this work.
You can also expect other costs such as Stamp Duty on any property over £125,000. This is tiered and is payable on the portion of the property that falls within each charge band.
Next you need to consider the cost of moving to your new property. This is where Movingboom.com can help you. Using Movingboom.com you can compare up to 5 removals quotes in seconds and save up to 50% on your moving costs by comparing quotes and hiring one of our trusted moving partners.
You should also consider getting good buildings and contents insurance to protect your home and belongings. Try the main comparison sites, but also try going direct to the insurance company as you can get some great deals buying direct. Comparison engines are paid on commission so you may just get a better deal by shopping direct.
You will need an Energy Performance Certificate which is now a requirement if you are selling, renting or building a property in the UK. This costs between £60 and £120. Costs tend to vary depending on the type of property and the number of rooms.
We have tried to include the main outgoings when buying a property. Make sure you plan ahead so that you are well prepared. Good luck in your new home.