Top 5 costs that buyers often overlook.
Getting on to the property ladder has never been harder and the average age of today’s first-time-buyer currently stands at 37 years old. The biggest obstacle that buyers face is putting together a large enough deposit in order to qualify for the more affordable mortgage products available. With average prices in London now in excess of £500,000, a deposit of £50k or more is often required by mortgage lenders in order to access their best rates. But the costs don’t start and end with a hefty deposit, so we’ve summarised the top 5 costs that are easily overlooked.
Mortgage Fees – Often lenders will charge a booking fee, a valuation fee and a product fee. The largest of these is the product fee which can normally be added to the mortgage so that you do not have to find the funds up-front, however you may have to pay out the booking fee and valuation fee upon completion of your purchase and these can range between £99 and £500.
Survey Costs – In addition to the standard mortgage valuation it is often advisable to instruct a private survey of the property which will include a structural assessment and report of the property. The basic report, known as a ‘homebuyers survey’ is often between £300-£500, with the more in-depth ‘full structural survey’ costing between £800-£1200.
Stamp Duty – The main tax that buyers face can add thousands to the capital required for a first-time purchase. Buying at £250,000 will incur a £2500 levy, but this jumps to £6250 at £325,000, or £10,000 at a £400,000 purchase price.
Moving Costs – Depending on how much ‘stuff’ you have accumulated during years of renting, you may need to enlist the help of a removal company to shift your furniture and boxes to your new home. We suggest budgeting between £200-£400.
Solicitors Fees & Legal Costs – Solicitors fees can range between £500-£800, with an extra couple of hundred if you are buying a leasehold property. You also need to add around £350 for the legal searches (local authority searches, chancel search, water & drainage searches etc), and a further £200 for other disbursements (land registry fees, bank transfer fees etc).
You May Also Enjoy
Guy Fawkes Night set to fizzle out for UK households
Budget tax raid could hit landlords for £3,500 a year
Upfront information: homebuyers want confidence as much as speed
How Financial Anxiety Drains Entrepreneurial Energy
How to future-proof a rental property for changing tenant expectations
