What costs will I have to pay when buying a house? Part two

What costs will I have to pay when buying a house? Part two

author: Dan Griffiths

By Dan Griffiths


In part one of this blog we looked at the deposit, mortgage fees and house surveys you’ll need to pay for when buying a home.

But that’s not everything – here we’ll guide you through some of the other costs involved with purchasing a house.

If you missed the first part, click here to catch up!

Stamp duty

Known as stamp duty land tax, this tax will be calculated based on how much you’ve agreed to pay for the property (not how much it’s on the market for). If it costs less than £125,000, you won’t have to pay a penny in stamp duty, but if it’s more than this, you will.

Here’s a breakdown of the different stamp duty tiers:

0% on properties £125,000 and less.

2% on properties between £125,001 and £250,000.

5% on properties between £250,001 and £925,000.

10% on properties between £925,001 and £1.5 million.

12% on properties costing £1,500,001 or more.

Remember that the tax you pay is tiered – so if you are buying a house for £130,000, you only pay the 2% stamp duty on £4,999 (so you’d pay about £100).

Solicitor/conveyancer fees

You will have to pay your solicitor or licensed conveyancer once you have finished using their services. Depending on how complicated or drawn out your home purchase is, conveyancing costs can vary, so if possible try to agree a fixed fee with your solicitor or licenced conveyancer. It’s wise to try and budget around £500 to £750 to cover this cost.

Local Authority Searches

Your solicitor or conveyancer will carry out searches on the property you’re looking to buy, in order to make sure there are no nearby planning issues that could affect you.

They will look for things like major roads, housing estates or supermarkets that are going to be built nearby that may affect your decision to purchase. Typically a search will cost around £300.

Home insurance

Your mortgage provider will likely insist that you take out a buildings insurance policy before they agree to lend you any money, so you’ll have to budget for this, too. However, you don’t have to take out a policy with your mortgage provider, and it usually pays to shop around to find a cheaper deal.

You’ll need to put your buildings insurance policy in place from the day you exchange contracts, as this is the moment when you become committed to the purchase. If anything were to happen to the property, such as a fire breaking out, you wouldn’t be covered if you did not have home insurance in place.

You should be able to customise your protection level to suit you, but at a minimum you’ll need to insure the structure of the building. Once you move in you may want to add contents cover to this too. The premiums for buildings insurance depend on a number of factors, but particularly the rebuilding cost and the location of the property – for example, if it is an area prone to flooding or subsidence. The premiums for contents cover will be impacted by the location of the property, the security measures you have in place and the value of your contents, amongst other things.

Removal costs

The final step you’ll have to budget for is moving your belongings out of your current address and into your new home. Of course, this cost will depend completely on how much stuff you own, and the removal company you decide to go with.

You could decide to do the move yourself, but you’ll probably still need to hire a van to help shift everything. Try and set aside a couple of hundred pounds for this.

There’s no avoiding it – moving house is an expensive business. That’s why it pays to be prepared and have the money saved to cover the costs you’ll incur along the way. It will all be worth it once you’re in your very own home.

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

author: Dan Griffiths

By Dan Griffiths

What costs will I have to pay when buying a house? Part two What costs will I have to pay when buying a house? Part two