Real Estate

Buying a New Home? Know your Budget

Written by AngelaJohn

A house is the most expensive thing most of us will ever buy, but it’s not just the bricks and mortar that will make a big dent in your bank account. “There’s a huge list of expenses involved in buying any property, so it’s important to take these into consideration before you sign on the dotted line” advises Battersea estate agent, Eden Harper.

Here are some of the costs you’ll need to consider when agreeing on your budget.

  • Mortgage Arrangement Fees –this is a fee charged by lenders to cover the administrative side of setting up your mortgage. Some lenders waive the fee although by no means all do, so it’s important that you are clear before you begin.
  • Lender’s Valuation: This is the standard valuation that will be required on the property you wish to purchase so you can be sure you’re paying a fair price. The cost of the valuation depends on the cost of the property, so again it’s important to check your facts first.
  • Professional Survey: if the property is older or has special or unusual features, you may wish to pay for this more in depth type of survey.
  • Legal/Conveyancing Fees: Buying a house is a complex process, so it’s the norm to instruct a solicitor to act on your behalf and deal with all the legal issues. “The fee depends on the size and value of the property you want to buy, but expect to pay at least £300 per £100,000” says London Bridge estate agent, Garrett Whitelock.
  • Stamp Duty is a progressive tax that is paid when you buy a residential property valued at £125,000 or more. Note: New laws introduced in 2017 mean that Stamp Duty is no longer payable on the first £300.000 for first time buyers.
  • Land Registry fees: the government department responsible for registering all properties in England and Wales charges a nominal fee (about £40) for transferring the details to a new owner.
  • Local Authority Search: your solicitor will conduct local searches with the council to ensure that there are no potential planning issues that might affect the sale. This fee is variable according to the individual authority, but you can expect to pay around £150.
  • Additional searches: you may have to pay for other search items such as index maps, land charges and company searches, to the value of around £70.
  • Agent’s commission: most agents will take a fee which is a percentage of the property purchase price. This should be clearly provided to you before the sale is made, so be sure to ask for all the information in writing before you commit.
  • Removal fees: You will also need to consider the cost of physically moving your things from one home to another. Some people choose to do this themselves, but don’t forget that also comes with costs of its own such as van hire and fuel. If you’re using a professional removal company you should still expect to pay a few hundred pounds.

M&M Property summarises, “Moving house is a costly exercise, so take the time to work out exactly how much you can afford and think carefully about all the expenses before you go ahead.”

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