What Are The Hidden Costs Of Buying A House?
We know that buying a house can be one of the biggest outlays of our money, but outside of the obvious costs, what are the hidden costs of buying a house that you need to factor in.
Yes, there is the cost of having a deposit, but what else can you expect to pay? In this article we help you to find out the hidden costs of buying a house, so that you can be more confident in being able to comfortably afford to buy your dream home.
Please note that the figures we have quoted are for guidelines only are correct at the time of writing and will differ due to changes in the law, the size and price of the property, etc.
Always seek professional help when buying a house.
Stamp Duty Tax
This is paid on properties over £250,000, but if you are a first-time buyer, then you only pay stamp duty on properties over £425,000.
- The first £250,000 of any property has no tax charged
- The portion from £250,001 to £925,000 will be charged at 5%
- The portion from £925,001 to £1.5 million will be charged at 10%
- The portion above £1.5 million will be charged at 12%
Get more information on Stamp Duty Tax.
Valuation Fee
This is a fee normally charged by the mortgage provider to check that the property you are purchasing is worth what you are paying for it and is typically between £150 and £1,500 dependent on the property value.
Some mortgage providers though will offer this free of charge, so it is always worth checking and shopping around.
Survey Fees
There are generally three different levels of survey that you can select; from a very basic survey which is generally suitable for newer properties, through to a very detailed survey designed more for older properties and those with potentially more issues.
Prices will vary dependent on the size and value of the property, as well as the level of survey selected, but typically will vary from around £300 to £1,500.
Legal Fees
You will normally need a solicitor or a licensed conveyancer to carry out all the legal work when buying your home and they will either charge you a flat fee or a percentage of the value of the property.
Typically, you can expect to pay between £850 and £1,500 plus VAT and you will often need to pay for the local searches to be completed too, which can add another £250 to £300 to the bill.
Electronic Transfer Fee
This fee is charged for the transfer of monies when completing the purchase of the house and typically costs around £40 to £50.
Estate Agent Fees
Estate Agent fees should only applicable if you are selling a house, not buying one and can vary between 0.75% and 3% of the property value.
Mortgage Fees
Most mortgage deals have at least one fee, sometimes two. Mortgage fees and costs are the extra charges you need to budget for when you take out a home loan.
These extra fees have been steadily rising in recent years and are sometimes known as a mortgage product fee or completion fee.
You can usually pay these fees by debit or credit card, a cheque or electronic bank transfer when you apply, although you could choose to add it to the mortgage balance instead.
By aware of doing this though as this means you will pay interest on it until you pay off the mortgage.
Mortgage fees typically range from about £500 to around £2,000.
If you use a Broker to arrange a mortgage, you may also have to pay them a fee. Your broker will explain all the fees you will have to pay before you agree to work with them.
Land Registry Fee
The Land Registry charges Registration Fees when making changes to the title documents of the property you are buying held at the Land Registry to show you as the new owner. This fee is often rolled into the list of fees your solicitor deals with, but not always.
Fees for registration are linked to the purchase price, but typically can vary between £45 to £1,105. In Scotland, there’s also a title registration fee to pay.
You can get more information on the Land Registry website.
It is worth doing your research into the hidden costs of buying a house, so that you have an idea of roughly how much it is likely to cost to buy a house in the price range that you are looking at.
This will ensure that you have sufficient funds to be able to meet the necessary costs and it is always a good idea to have a bit of a buffer too, for any other hidden extras that might occur or increases in prices that may happen at any point during the house buying process.
If we can be of any further assistance, please get in touch.