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Property buying in the UK can come with a lot of extra expenses that are unknown to those buying their first home. KnowYourMoney has shared a number of top tips with Express.co.uk on what financial pitfalls to be aware of when you’re planning to move out for both beers and renters.
Before purchasing a property or deciding to rent, factors such as price and location will be a top priority for most people.
Many will not think about or know about the additional fees that may be associated when it comes to moving home.
Understand the mortgage landscape
The government has raised the stamp duty threshold to £500,000 until March 1st 2021, which is helping many buyers to save some money on their property purchases.
However London’s leading property buying agent, Curetons, reiterates the fact that although you may not have to currently worry about this extra cost, there are other financial impacts to consider.
Curetons said: “The stamp duty holiday is tempered with the fact that because of the economic issues caused by COVID-19 the range of mortgages on offer to buyers has dramatically decreased.
“A lot of the best deals have been removed and lenders are demanding much bigger deposits and decreasing the salary multiples they will lend on. We’d always advise getting a written mortgage offer in place before you start your property search.”
Additional costs and fees
KnowYourMoney said: “It is important for buyers to be aware of additional costs that occur during the process of buying a house. These include solicitor’s fees to carry out all required legal work which typically range between £800-£1,500, as well as local searches to determine if there are any local issues or plans to be aware of, averaging between £200-£300.
“Another fee to consider is the land registry fee, to transfer the buyer’s name onto the property. The cost for this is determined by the value of the property.
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“Lastly, many lenders charge a product or completion fee for their mortgage, which is usually between £1,000-£1,500. However, many lenders offer the option of adding this fee to your overall mortgage payment, which may be of interest to buyers who want to avoid having to pay another large sum on completion.
“It is also important to be aware that many of these fees, for example solicitor or searches, are non-refundable, even if the purchase ends up falling through. Therefore it is crucial to be fully aware of all the costs involved before starting the process of buying a home.”
Renting a property in the UK can also come with some hidden costs that those moving out or moving home should be aware of.
Helen Hollingsworth, lettings partner at Bramleys shared her top tip when it comes to moving into rented accommodation.
She said: “One of my main top tips for first-time renters when moving out would be, don’t be duped by letting agents’ fees. Tenancy related fees covering assured short-hold tenancies, student lettings and lodgers living with a private landlord were banned back in June 2019.
“You shouldn’t be asked to pay for things such as credit checks or references when agreeing on a new tenancy nor any administration costs relating to drawing up the tenancy agreement, a moving in fee or payment for immigration checks.”
It’s easy to get swept up in ensuring you have saved enough money for a deposit and any associated fees, that you may actually forget to consider what you’re moving in to.
Making a place feel like home takes money and it can be easy to get carried away, however, there are ways to be more sensible and save a few pounds.
Looking at more affordable options when it comes to furnishing a home like charity shops and second hand items from family and friends can make a house feel like a home.
Once you have moved into a home, it is important to budget for things like a mortgage, rent, bills and food.
KnowYourMoney added: “Although not a cost directly associated with the moving out process, if this is your first property or rental, it’s likely that you are not used to the direct debits that will start coming out of your account each month.”
Budgeting your money every month can help you make sure you are not short of cash.
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