You’ve saved up a big deposit, spoken to a mortgage adviser, and have your favourite searches saved on Rightmove and Zoopla.
But have you budgeted for everything you’re going to spend when you buy your house? The hidden costs of moving house can easily mount up.
Avoid nasty surprises along your property purchase journey by budgeting for these costs before you get started with buying a house!
Costs of finding a property
The simple act of looking for a house can set you back hundreds of pounds, especially if you’re relocating to another region.
Make sure you budget for fuel and transport costs to viewings, and overnight accommodation too if you’re looking to buy further afield. You’ll also need to account for taking time off work to view properties and, where required, childcare costs for your children too.
Conveyancing fees
Conveyancing is the process your solicitor conducts to transfer the property from the vendor’s ownership to yours. They deal with the Land Registry and handle all paperwork relating to the sale.
Conveyancing fees vary depending on the amount of work required. Additional searches, property advice, or new covenants for your purchase contract are all examples of extra fees you may come across.
You can typically expect to pay between £850 – 1,200 for conveyancing fees. Remember to double this budget if you’re selling a house you already own in order to buy another one, as you’ll be both a vendor and a buyer.
Removal company services
There are several options for removal services: rent a truck and do it yourself, pack everything yourself and pay a moving team to take your belongings from A to B, or a full service including packing.
Doing some or all of the removals process yourself significantly reduces the cost. You can hire a Luton van for about £100 a day, depending on your location and whether you’re returning the van to the same depot at the end of the hire.
Most people opt to pack their boxes themselves and pay a team to move their furniture and belongings for them. A three-bedroom house will set you back an average of £1,200-£1,800, or more if you have a lot of heavy or expensive items that require additional care, such as a piano.
The full-service option is great for busy people or those without able-bodied friends and family to help out. A team comes into your home to pack everything for you, transport it to your new home, and unpack it if you need, too. As you may expect, this is a very expensive service costing upwards of £3,000 for a small two-bedroom flat. However, it does save you time and effort.
Surveyor fees
Your solicitor does all of the paperwork searches, such as a Chancel Repair Liability Search, Mining Report, and Flood Risk Report. However, a property surveyor will visit the property in person and look for potential problems with the structure and boundaries.
You don’t have to have a home buyer survey if you’re a cash buyer, but mortgage lenders require you to conduct at least this basic-level survey before confirming a lending agreement. If the property is old or of unique construction, a more in-depth survey may be required too.
A home buyer report costs from £400, with more detailed buildings surveys costing more.
Stamp Duty Land Tax
You’ll need to pay a tax to the Government when you buy a home over the value of £125,000, called Stamp Duty Land Tax. The rates are calculated on portions above this amount.
The first £125,001 - £250,000 is charged at 2%. Between £250,001 and £925,000 this goes up to 5%, and from £925,001 to £1,500,000 is 10%. Finally, the portion above £1,500,000 is paid at 12%.
For example, if your house costs £200,000, you’ll pay nothing for the first £125,000.
Then, you’d pay 2% on the remaining £75,000, meaning your Stamp Duty tax bill will be £1,500.
If you already own a property and are buying another one – not replacing your main residence – you pay an additional 3%.
If you’re buying your first home, you’ll receive relief on properties up to £500,000. That means you only pay on the portion over £500,000.
We recommend that you seek independent tax and legal advice as mortgage advisers are not qualified to offer tax advice.
Mortgage valuation and arrangement fees
One final cost you’ll come across will be mortgage valuation and arrangement fees. These vary wildly depending on your personal circumstances and the loan amount and duration.
To minimise expensive mortgage arrangement costs, you can speak to a mortgage adviser first. They’ll be able to find you the right mortgage deal for your personal circumstances – and often have access to rates that aren’t available on the high street.
Speak to your local mortgage adviser in Middlesbrough on 01642 386319 to find out more about mortgage fees.
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