The hidden costs of buying a home

The hidden costs of buying a home

author: Emily

By Emily

If you’re thinking about diving into the world of home-buying soon, it’s important to understand the total costs involved.


Buying a home is an exciting but stressful time. Whether you’re moving into your first home, stepping up the ladder or buying your forever home, there are a few hidden costs to look out for along the way.

It’s a good idea to have some extra money saved up for these additional costs so they don’t catch you off guard. Here are some of the top things to watch out for when budgeting for your new home.

Stamp Duty

Depending on the price of your new property, stamp duty can add up to thousands and thousands of pounds. This could be as much as 7% added to the cost of buying a home. Stamp duty is the government tax on homes costing over £125,000. If you’re a first-time buyer there’s good news though as you may get a discount, meaning you could pay less or even no tax if the purchase price is £500,000 or less.

Surveys and Reports

When it comes to buying a home, surveys are a must. They can tell you the state of your building’s construction and condition before you sign the dotted line. But, the cost of these surveys can often come as a surprise to a lot of first-time buyers.

It’s also worth looking at getting a Home Buyers report done too. There are different levels of reporting available and all are beneficial if you’re looking into buying an older property, as they test for any structural problems, subsidence and damp. It’s worth noting that costs start from around £400 on average, so definitely stash some money aside for this one.

Valuation Fee

Another hidden cost which is often overlooked is the valuation fee. This is a compulsory step required by your mortgage lender. Your bank or lender will visit the property you are looking to buy and assess the value to see how much they are prepared to lend you. Some lenders might not charge you for this depending on the type of mortgage product you’ve selected, but if they do, this fee can set you back anywhere from £150 up to £1,500!

It’s important to remember that your lender’s valuation won’t include a full survey so it might not include things like structural problems and any repairs that need to be made.

Bills, bills, bills

If you’ve never owned a home before, or you are moving up the property ladder to a bigger house, your utility bills can become expensive monthly costs. Although these are expenses that are pretty unavoidable, by planning for these in advance and shopping around for the best possible rates, you could save yourself a bit of money over the year.

Unfortunately, you can’t shop around for your council tax! The amount you pay is based on where your property is located and the band the house sits in. The cost for this ranges from a couple of hundred pounds for smaller properties in low cost areas to thousands of pounds for bigger houses in expensive areas!

Insurance

Something we need and hope we never have to use. More often than not, you can speak about insurance with your mortgage provider as they require you to have insurance in place when they finalise your offer. Depending on what you’re insuring and for how much, your building and contents insurance can cost you anything between a hundred pounds to thousands of pounds a year.

Your insurance will be based on how much your home is worth, its build date, construction material and what the rebuilding costs would be should something happen. Your building and contents insurance will also protect things like expensive fittings, electronics and furniture.

Maintenance and Repair Work

When you went to view the property was there anything you spotted that needed doing up? How old is the boiler? Were there any leaks? Does the roof need any repair work? These are all costs that can add up very quickly.

Think smart and have money put to one side for when you’ve moved in for any essential work that needs doing. By fixing these things quickly, you could save on bigger costs in the long run!

Keep Track Of Your Budget

It’s important to stay ahead of the game when moving to a new house. It can be easy to get lost in the throes of buying somewhere new, but all the excitement of the move could mean you lose track of what you’re spending.

Look often at your budget and if necessary, get all the costs down onto a spreadsheet or document that you can easily pull out and refer to. As you settle into your new home, grab yourself a cup of tea and make time to sit down and go through what you’ve got coming in and going out each month.

Disclaimer: All information and links are correct at the time of publishing.

author: Emily

By Emily

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The hidden costs of buying a home The hidden costs of buying a home