buying a home

Buying a new house can be expensive, but how much does it actually cost? Obviously, the answer to this question depends on the value of the house you’re buying, but this isn’t the only factor to consider when thinking about the costs of buying a house. You also need to consider:

  • Legal fees
  • Stamp duty (if this applies to you)
  • Moving fees such as hiring movers (again, if this applies to you)
  • Furnishing
  • Mortgage costs
  • Valuation fees

Legal Fees

Legal fees are often costly but an unavoidable cost when buying a house. Solicitor fees can vary but are typically between £800 – £1500.

It is important that you instruct a solicitor or licensed conveyor to deal with the sale of your new home as they will look into the property’s condition, accompanying documents and should be able to tell you anything which you may need to know before deciding to go ahead with the purchase of your new home.

Solicitors will also carry out local searches for you to check the property appears as it should on the local land registry and if there are any plans or problems which may affect your sale.

Stamp Duty

Stamp Duty is a land tax you pay when purchasing a home over £125,000 in value. The amount of Stamp Duty you will pay will depend upon the value of the house you purchase. You will not pay any stamp duty on your property up to the value of £125,000 but will pay 2% of the value of your house after that.

For example, if you purchased a house for £250,000 you will pay roughly £2,500 in stamp duty, as this is 2% of the value of your property after subtracting the tax-free portion of £125,000.

First-time buyers will not need to pay Stamp Duty on a property that is worth up to £300,000. If the property is worth more than £300,000, you will pay no Stamp Duty on the first £300,000 of your property, but pay the usual 5% on the remaining value of the property.

If you are required to pay Stamp Duty, you will need to do this within 30 days of completing on your new home.

Moving Fees

You should have a good think about if you need to hire movers before your house move. If you’re moving into your first home from your parents’ house, you may not have that much furniture you need to move, so you may be better just hiring a small van for the day.

If you are moving from a home which you have already furnished, it may be worth hiring movers to help you. Movers will do a lot of the heavy lifting and will allow you to get everything moved in all in one day.

The average cost of hiring movers is between £50 – £60 per hour.

Furnishing

If you’re buying your first home, you may be in a position where you will need to fully furnish your new home. Furnishing a home from scratch can be expensive, but there are ways around this.

Before running out and buying pricy couches, wardrobes and anything else you might need, have a mooch around local charity shops. You would be surprised what you can find in a charity shop! Furnishing your new home with items from a charity shop is a great way to save money when making the initial move. You can always buy more expensive luxury items once you are all settled into your house and your finances have recovered from your move.

Charity shops will also often deliver your furniture to you for a small fee too!

Mortgage costs

There are many different kinds of mortgage products out there which vary in many ways, but one thing you may encounter when buying a house is a product fee. Some lenders charge buyers a product fee if you take a mortgage out with them. Product fees are often applied to mortgage products to fix your interest rates or offer you lower fixed interest rates.

Mortgage fees often aren’t a huge expense, but could cut into your budget pretty early on in the home buying process if you’re not careful.

You can find out more about mortgage product fees here.

Valuation fees

A valuation fee is a fee you will pay to have the value of your property assessed. Your mortgage lender will demand a valuation be carried out on the property you’re hoping to buy before they will decide if they will lend to you or not. Some lenders will charge you a valuation fee and others will not.

A valuation can cost anything between £150 – £1,500 depending on the property value.

After a valuation you may be recommended to have a survey carried out. A survey is a more in depth look at the property’s overall condition and will flag any issues with the property which may not be obvious upon just viewing it before you purchase the home.

The price of a survey can be anything between £250 – £600 depending on how in depth the survey is.

If you would like to find out more about how you can work out how much buying a home will cost you, use Money Super Market’s Cost Moving Calculator.

You can also use Open Door’s Eligibility Calculator to work out what kind of home ownership product may be best for you.

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