First-time home buyers What household bills will I pay as a homeowner?
Understand the household bills and maintenance costs you should budget for when you buy your first home.
When you own a property, you have to pay for certain bills and expenses that you wouldn't have done as a renter. Here, we list all the costs you should budget for, some of which you may also have paid as a rental tenant, and some of which will be new.
What household bills will I pay as a homeowner?
Your payments may vary from one month to the next depending on what type of mortgage you have. It is important to check whether you'll be able to afford your mortgage in the long term, especially with the prospect of interest rates going up.
You can see what your monthly payments will look like now, and also if interest rates went up by 1, 2 or 3%, using the mortgage repayment calculator on our house-buying hub.
- Free mortgage consultation: for one-to-one advice on getting a mortgage based on your own personal circumstances, have a chat with the impartial experts at Which? Mortgage Advisers on 0808 252 7987
These include your electricity, gas and water bills. They will usually increase in line with inflation every year but some energy providers increase charges at a far faster rate, so it's worth keeping an eye on this and switching if you think you're paying too much.
The energy performance certificate for the property you're buying will help you see how energy-efficient the building is, which should give an indication of how much your bills will be.
- Find out more: Which? Switch - save money by changing energy providers
Properties are classified in bands ranging from A to H and, as strange as it might seem, the price you pay is usually determined by what the home was worth in 1991.
The seller or estate agent should be able to tell you which band your new home is in, or you can look it up online.
If you think your property is in the wrong council tax band and you're paying too much tax, you can appeal against your banding. By doing this, you could save up to £1,865 a year - but be aware that the council could decide to move your property into a more expensive band rather than a cheaper one, so you should only appeal after carefully researching what your neighbours are paying.
You can also apply for a 25% discount if you live alone or if the property is empty.
- Find out more: reducing your council tax bill - how to qualify for a lower rate
You'll probably want broadband and digital TV in your new home, and maybe a landline too. Often, new customers will get better deals than existing ones, so it's worth shopping around and considering switching to find the best deal each year.
- Find out more: haggling for the best broadband deals - people who've followed our haggling script have reported saving as much as £476 a year
The TV licence costs £145.50 per year, although you can pay monthly. This charge is frozen until March 2017, and after this date the BBC is aiming to increase the cost in line with inflation.
When you own a home you'll have to pay for buildings insurance (unless you own a leasehold property). This type of insurance is required by most mortgage providers. It's also advisable to take out contents insurance to protect your belongings.
These costs are likely to increase with inflation every year, although you can nearly always find a cheaper deal by shopping around rather than automatically renewing with your existing provider.
- Find out more: best and worst home insurance providers - see how different insurers score for value for money, customer service and more
Service charges and ground rent
If you live in a flat, you'll have to factor in monthly or quarterly service charges and ground rent. Service charges are used to pay for the management and maintenance of the building's communal areas and tend to cost between £100 and £200 a month.
Most freeholders appoint managing agents to look after communal areas, so these fees may be combined into one payment.
- Find out more: leasehold vs freehold - find out about the key differences between the two types of home ownership
If you don't have a garage, driveway or free on-street parking, you might need to budget for a local car parking permit.
Home repairs and maintenance
These costs vary from one property to another. Maintenance for smaller homes will typically cost £500 per year, but for larger properties it's likely to be in the region of £1,000. It's worth putting a bit of money aside each month so that you're prepared if you're hit with unforeseen maintenance or repairs costs.
Here are some of the most common types of maintenance that you should factor into your budget:
- Boiler servicing: it's worth getting your boiler serviced once a year - when you come to sell your home some buyers will ask about this.
- Electrics: you should get your electrics safety-checked every five to 10 years.
- Decoration: cosmetic changes, such as painting and decorating rooms, will also generally need to be done every five to 10 years.
- Renovations: one-off renovation work, such as replacing kitchens and bathrooms, might be done every 10-20 years.
First-time buyer video: unexpected costs when buying a property
First-time buyers Chris, Lydia and Amanda talk about the unexpected costs they faced when buying their first homes and offer practical tips to help you budget for them.
- The cost of buying a house - understand all the one-off costs you'll face when you move
- Am I ready to be a first-time buyer? - how to decide whether now's the right time for you to buy
- The Which? home-buying quiz - how much do you know about mortgage and home-buying?
Your home may be repossessed if you do not keep up repayments on your mortgage.
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