Buying a home? Four additional costs – why you could pay an extra £8.5k

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Buying a house is an expensive investment, especially in the current property market. The latest Nationwide House Price Index report revealed the annual property growth hit 12.6 percent in February 2022, pushing the average UK property past £260,000 – an all-time high for the market. However, for Britons preparing to put their money down on a property, this isn’t the only cost they are likely to face.

Experts from Stipendium put together a step-by-step guide highlighting the process of buying a home, and in it are a number of costs buyers might not have thought about while saving.

These range from taxes to paying a property solicitor to mortgage fees.

This is why the experts are urging Britons to do their research and be prepared before starting the process.

Christina Melling, CEO of Stipendium, said: “Buying a home can be a long, expensive, and stressful journey, but there are so many ways of reducing the time, cost and emotional impact of your purchase.

“The best place to start is being very well prepared and staying on top of your responsibilities throughout the process.

“Don’t wait until the last minute to commission surveys, for example, and don’t wait until you’ve made an offer to start the mortgage process.”

But just how much more can buyers expect to pay on top of the actual cost of being their home?

According to Stipendium’s research, this could be around £8,500.

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This is broken down into the following:

Getting your mortgage set up

This is one of the most crucial, and first things buyers will need to do when preparing to purchase their home.

According to Ms Melling: “The fees associated with setting up a mortgage usually amount to around £1,500.”

Getting a mortgage approved in principle is a good way to get this process started, and makes it quicker to turn into a fully-fledged mortgage agreement.

Conveyancing and surveys

Conveyancing is an umbrella term for all the legal processes that must be completed before a house sale can itself be completed.

A conveyancer or property solicitor must be hired to conduct the process and will complete searches, draft contracts and prove property title ownership.

According to Stipendium’s research, this could cost anywhere from £400 to £1,500.

Surveys are also an essential part of the buying process.

Often, your mortgage provider will want to conduct their own survey.

This will ensure the property condition is as listed by the seller.

However, buyers should hire their own surveyor as well to check for any structural issues in the home.

Stipendium’s research concludes that surveys can cost up to £1,500.

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Stamp Duty Land Tax

Once everything is completed, most buyers must pay any required Stamp Duty Land Tax (SDLT).

According to the experts: “The amount payable depends on the sale price of the property, but first-time buyers in England are, currently, exempt from this tax.

“In England and Northern Ireland, the average SDLT bill is £3,735. In Wales, it’s £3,735.

“And in Scotland, it’s £2,735 for first-time buyers and £3,335 for everyone else.

“This tax must be paid within two weeks of completion.”

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