The hidden costs of home-buying

Caroline Cassidy

There's nothing quite like finding the perfect house, whether it's that first step on the property ladder, or the family home you've always dreamed of. It is also the biggest single purchase most of us will make in our lives, and as well as the cost of the deposit and mortgage itself, there are other hidden extras you should factor into your budget.

Hidden costs of buying a house
Hidden costs of buying a house

Pic: Getty

Lender extras
You've found the best interest rate and a lender willing to loan you the cost of your new home, but there are almost certainly a few extras to take care of. In many cases, lenders will charge an arrangement fee for setting up the mortgage. While some will not charge a fee, generally, it is around the £1,000 mark, although the cost does vary, and it's worth checking whether the fee is non-refundable should the purchase fall through. On the plus side, many lenders will agree to add the fee onto the cost of the mortgage, which can ease the pressure, but bear in mind you will then be paying interest on the amount.

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Most lenders also charge a valuation fee, usually in the region of £300. Don't be fooled into thinking this is a survey - it is simply for the lender to check that the property exists, giving them security to lend you the cost of your home.

Stamp duty
Anyone buying a property over a certain price in the UK is liable to pay Stamp Duty Land Tax on the purchase. The threshold is currently £125,000, so if your property is under that price, then you escape this extra cost. Over and above, stamp duty is charged as a percentage of the total purchase price, e.g one percent on a property between £125,001 and £250,000, three per cent on a home costing between £250,001 and £500,000 and so on. It's a sizeable cost and one you should definitely budget for.

Surveys and solicitors
What looks like the perfect property on the outside can be hiding a multitude of potentially expensive sins, so a survey is unfortunately something of a necessary evil when it comes to buying a house. They vary greatly in terms of cost and how in-depth the investigation, from around £200 for a Home Condition Survey to upwards of £700 for a Building Survey (the most detailed type).

Then there's the conveyancing, for which you will need to pay a solicitor. There will undoubtedly be local solicitors that will be only too happy to do the job, but expect to pay up to £800, depending on the purchase price of the property. Alternatively, there are a number of online sites that offer much cheaper rates, but it is advisable to do your research and look for reviews from buyers who have used their services.
Removals and repairs
Not so much an issue if you have little to take and can do the move yourself with the help of a hired van, but for anyone shifting a household's-worth of stuff, removals can cost a pretty penny. How much you pay depends on the distance between the two properties, and whether you are willing to do the packing yourself or would prefer the professionals do it, but it could cost up to £1,000.

And last but not least, even if your property is in excellent condition, be prepared to do the odd repair, even it's a leaky tap or a fresh lick of paint. Putting aside some extra cash for any unexpected problems will mean you can fully relax once you settle in.

Have you been stung by the hidden costs of buying a home? Leave your comments below...