The Hidden Costs of Buying a Property


Purchasing a new property can quickly become more expensive than originally expected. There are plenty of hidden costs to take into account, all of which can add up to 10% extra to the total costs.  

Former renters are often shocked at how much more it costs to buy a property and without the correct preparation, you’ll encounter some real hardship.

Conveyancing

This is the legal procedure of buying a property, as well as search fees and joining the Land Registry.

So how much will this cost? Well that will depend on the value of the property you’re purchasing and what searches you’ve completed. Its costs can range from £800 - £1500 and are more for leasehold homes.

Surveys/valuations

These can add up quickly, ranging from a couple hundred pounds to over £1000, depending on the value of the property. Check out our recent blog explaining the different kinds of surveys and which is best for you.

Stamp duty

This is the tax that is levied on legal documents and can add as much as 7% extra to the total cost of buying a property.

Mortgage fees

On top of your standard mortgage, there are other up front mortgage fees that need to be considered:

Arrangement fees: these are often charged by mortgage companies and range from just a few hundred pounds to 1% of the mortgage value. Some lenders prefer it being paid up front whereas others may add it to the mortgage.

Indemnity fees: usually if you had a high loan-to-value ratio, the lender might charge a fee that covers the insurance they take out in case you can’t pay back your loan. Fortunately many lenders won’t charge these fees even for those borrowing a hefty amount of the purchase price (90% even).

Broker fees: some mortgage brokers don’t charge fees, whilst others can charge up to 1% of your mortgage. If you’re looking for expert mortgage advice, speak to one of our Just Mortgages advisers to see what mortgage deals you could be eligible for.

Removals

If you don’t have much furniture and have some generous friends, this can be done at little cost. If you do have a lot of furniture, hiring a removals firm is your best bet. It can be costly, but with the right research you can select a company that best meets your needs and budget. Check out our blog on selecting a removals firm for more advice on this.

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