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Boomin Answers: Costs of Buying a House

Whether you’re buying your first home or need a refresh on the latest fees, take a look at the average cost of buying a home.

Faye deGavre

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Jun 02, 2021

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4 min read

Boomin Answers: Costs of Buying a House

When buying a home and working out what you can afford, it's only natural to focus on the asking price. But that's not the whole story. There are umpteen other costs that would-be homeowners need to factor into their budget.

To avoid undue stress on your finances, it's best to know what to expect. Whether you're a first-time buyer or a homeowner who needs a refresher, here are the costs of buying a house you need to be prepared for.

What are the upfront costs of buying a house?

Before you start looking at properties, know what you can and can’t afford (trust us, you’re setting yourself up for heartache if you don’t). Below are just a few of the immediate house buying fees you can expect.

  • Mortgage set-up fees

Unless you have significant savings, you’ll need to take out a mortgage to purchase a home. When you arrange a mortgage with a lender, you may face a booking fee (usually between £99 and £250), an arrangement fee (up to £2,000), and possibly an electric transfer fee (£25 to £50).

  • Valuation fee

This is paid to your lender, where they will carry out a mortgage valuation survey. This is to reassure the lender that the home is worth the amount you’re borrowing from them. Depending on the lender and property value, the cost could be upwards of £150. Keep in mind that this valuation is not a full structural survey, and not all issues or repairs will be identified.

Maybe say "... the amount you're borrowing from them." Just to avoid repeating "lender/lending" and bring it back to the reader's POV. [JH1] (#_msoanchor_1)

  • Survey fees

Before purchasing a property, get it checked by a surveyor who can tell you if there are any major issues or areas of concern. Surveys range from a basic check costing around £400 to a comprehensive structural survey for £600 or more.

  • Solicitor fees

Buying a home is likely to be one of the largest purchases you’ll ever make. As a complicated transaction, you’ll need the help of a solicitor who will handle the legal aspects of the purchase, from drawing up the contracts, paying the correct stamp duty, transferring funds for the purchase, requesting searches and more. Depending on the firm, these costs average between £500 and £2,000.

  • Land Registry fee

Compared to the other costs, the Land Registry fee is a drop in the ocean, averaging just a couple of hundred pounds. Once paid, the land’s title will be transferred into your name. Typically, your solicitor will handle it so you may see this in their itemised invoice.

  • Stamp Duty Land Tax

Stamp duty isn’t a fee for everyone. First-time buyers in England and Northern Ireland are not subject to paying stamp duty on properties under £300,000. Once the property sale reaches £300,001 to £500,000, first-time buyers will only pay this tax on the amount over £300,000. 

For everyone else, the stamp duty rates in England and Northern Ireland are usually between 2% and 12% of the property. Homeowners in Wales and Scotland have Land Transaction Tax, rather than stamp duty, which works in a similar way.

Take a look at the government’s stamp duty calculator to know what to budget.

  • Mortgage deposit

As you may well know, the deposit is the amount of cash you put down on a property. Typically, the larger the deposit you can pay, the better mortgage interest rates you can enjoy.

Most homeowners aim to put down 10% to 20% of the purchase price, though look out for incentives that accept as little as 5% down to help people get on the property ladder. 

  • Moving costs

Unless you can round up a group of friends to shift your items, you’ll probably want to hire a van or a removal firm. Ranging from a couple of hundred to a couple of thousand pounds, removal expenses will depend on your needs. Be sure to budget cash, as you’ll likely need to pay for a van or a removal team the day of or before.

What are the ongoing costs of buying a house?

That's the upfront costs of a property purchase covered. But you'll need to consider ongoing costs, too. Here are some of the main expenses to bear in mind.

  • Maintenance and repairs

If there are any immediate repairs needed (e.g., something minor like a leaking tap or a significant expenditure like a new boiler), be sure to accommodate these costs. Your survey should have highlighted any issues you’ll need to fix straight away.

Even before you’ve got the keys, you may be eyeing up new décor. But buying new carpets, curtains, paint, white goods and furniture can quickly blow your savings. Our advice? Create a realistic budget and stick to it. You can always add to your new home once you’re settled.

  • Mortgage payments and interest

Your mortgage payment will depend on the property price, mortgage type, deposit, credit rating – even your age. When looking for a mortgage, make sure you shop around and compare deals. Using a mortgage broker is a great way to understand your options. You need to pay your mortgage payments on time every month. If you want to pay off your mortgage sooner, you may face an early repayment charge (but check with your mortgage provider). 

  • Council tax

Council tax is the fee you pay annually or monthly, which goes towards funding local services such as the police and fire services, rubbish collections, parks, libraries and transport. There are 8 different tax bands in England, and the price you pay will depend on the band in which your property falls. To find out the exact cost, check the council tax bands.

  • Home Insurance

Your home and contents insurance policy is there for you when the worst happens. If your home or your belongings are damaged in a covered incident, your coverage will help to rebuild or replace your property. The cost of insurance depends on the size and value of the house, the location, your belongings and your chosen coverage.

Any other house buying fees?

  • Disconnection of services (gas, electricity, water)
  • Reconnection of services
  • Utility bills (gas, electricity, water, TV, phone and broadband)
  • Kennelling of pets
  • Mail redirection
  • Life insurance

Buying your next home starts here

Whether you’re buying your first home or your second, now you know the average costs of buying a house and how to prepare. Buying a home is no small feat, but at Boomin, we’re here to help. As an always-on property platform, you can browse homes and book viewings online, 24/7. With a wider buying experience, search the vast range of properties for sale today.

Faye deGavre

Content Writer