The hidden costs of buying a home: What to budget for

Posted November 25th 2023

Buying a new home can be an exciting journey, but the price you've agreed with the seller is just one piece of the financial puzzle.

Several hidden costs can add up quickly, catching you off guard if you're unprepared.

Let's delve into some of the easy-to-overlook expenses so you can budget wisely and avoid unpleasant financial surprises.

Stamp duty

Perhaps the most significant additional expense, Stamp Duty, is a tax levied on property purchases. The rate varies depending on the property's price and your circumstances, such as whether you're a first-time buyer or already own a home. Always factor Stamp Duty into your budget; it can add thousands to your overall costs. A good estate agent will advise you on this.

Conveyancing fees

Conveyancing involves the legal transfer of property ownership. Solicitors or conveyancers handle this intricate process, and their fees can range from £500 to £1,500, depending on the property's complexity. The fees typically cover various elements, including local searches and land registry checks. Seek trusted recommendations.

Survey costs

Before finalising your purchase, you'll want to carry out a survey to identify any potential issues with the property. Surveys can cost anywhere from £250 for a basic report to over £1,000 for a comprehensive analysis. Skipping this step to save money can lead to expensive problems.

Mortgage arrangement fees

Many buyers are surprised to learn that securing a mortgage often comes with its own fees, which can run between £0 and £2,000. Some lenders will allow you to add this cost to your mortgage, but this means you'll be paying interest on it for the loan's duration.

Removal costs

Don't forget about the cost of actually moving your belongings to your new home. Depending on the distance and the amount of stuff you have to move, hiring a removal company is a cost you'll need to budget for. Get three quotes from reputable removal companies.