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).

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