Video: the cost of buying a house
When it comes to buying a house, there are more costs to save for than you might imagine - and budgeting properly will help you avoid nasty surprises further down the line.
In the video below, property TV presenter Jonnie Irwin explains the costs you need to take into account when buying a home.
Home-buying costs at a glance
The table below gives an overview of the extra costs that can come with buying a property.
|Type of cost||Estimated cost|
|Mortgage fees and charges a||£0 - £1,500|
|Valuation fees b||£0 - £700|
|Property survey costs c||£400 - £1,500|
|Conveyancing fees d||£780 - £940|
|Removals costs e||£50 - £1,500|
|TOTAL||£1,330 - £6,140|
a) Moneyfacts, October 2019 b) Based on 10 of the 15 largest mortgage lenders according to UK Finance (July 2019) that charge valuation fees c) Designsonproperty.co.uk, October 2018 d) Based on an average of five quotes obtained from conveyancingcalculator.co.uk in July 2019 for a property purchase in England e) Based on van hire quotes from Hertz and removals quotes from AnyVan.com in August 2019 for a move to an equal-sized property within nine miles.
You can find more detailed information about each of the different costs below.
More than half of mortgages come with arrangement fees and other charges for setting up the loan, according to data from Moneyfacts in October 2019. These fees can typically range from around £100 to £1,500.
While it might seem like a no-brainer to go for a fee-free mortgage, you will often find that these deals come with higher rates.
If you decide to go with a mortgage that carries a fee but you can't afford to pay it upfront, you can usually add it to your loan. This will end up costing you more, though, as you'll have to pay interest on it.
You can check the true cost of deals using our mortgage repayment calculator.
When you apply for a mortgage, the lender will carry out a property valuation to check the home is worth roughly what you're planning to pay for it.
The lender will usually arrange the valuation for you, but you may be expected to cover the cost. This is typically between £200 and £700 (see the table below).
|Average valuation fee||£205||£295||£425||£540||£615||£675|
Based on 10 of the 15 largest mortgage lenders by outstanding balances according to UK Finance data (July 2019) that charge valuation fees as of August 2019.
House survey costs
Your lender's valuation survey only looks at how much the property is worth – it doesn't cover structural issues, and won't highlight any problems with the property.
To protect yourself from buying a house with defects, you should always have an independent property survey done, too. The most common types of survey are:
- The Rics HomeBuyer Report, which examines the general condition of the property you're going to buy.
- A building survey, also known as a structural survey, which provides a more in-depth analysis of the condition of the property and its structure.
However, if you're confident that the building is in good nick and don't plan to do any work to it, you could opt for the more basic Rics Home Condition Report, which is only suitable for modern homes in good condition.
The figures below give a rough idea of what you might pay depending on the price of the property you're buying.
If you're buying a new-build property, you should commission a professional snagging survey to check for any issues with a new-build home. This will include any serious structural problems as well minor issues, such as a door not closing properly.
|Level of report||Property price|
|Up to £99,000||£100,000-£249,000||£250,000-£349,000||£350,000-£499,000||£500,000+|
Homebuyer Report/Home Condition Survey
(For new-build homes)
|£300 - £600, depending on the size of the property|
Data source: Designsonproperty.co.uk, October 2018
Figures gathered from designsonproperty.co.uk in October 2018.
- Find out more: house survey types
You'll need to hire a property solicitor or licensed conveyancer to handle the legal aspects of buying a property. This process is called conveyancing.
The table below shows how much you could pay:
|Fee type||Value of property|
|VAT at 20%||£122||£127||£132||£132|
|Leasehold (if applicable)||£92||£92||£92|| |
Based on an average of five quotes obtained from conveyancingcalculator.co.uk on 31 July 2019 for a property purchase in England.
You can find out more about the different charges and what they mean below.
Your solicitor will either charge you a flat fee or a percentage of the value of the property. You can expect to pay between £500 and £1,500 depending on the type of property, its location and how complex the transaction is.
Money transfer fees
This covers transferring cash between mortgage lenders, conveyancers, buyers and sellers.
Land Registry fees
The Land Registry is a government department that keeps records of all registered properties in England and Wales.
It charges a fee for registering a property with a new owner. This fee will also vary depending on the property price, but you can expect to pay between £90 and £140.
Searches are carried out by your solicitor, and are required to identify anything that might negatively affect the home you're buying (eg flooding).
If you're buying a leasehold property, you'll need to pay a fee which usually remains the same whatever the price of the property.
- Find out more: conveyancing when you're buying a property
Stamp duty costs
Stamp duty is a tiered tax on land and property transactions over £125,000 - but not everyone has to pay it.
This section offers an outline of how the system works. To find out exactly how much stamp duty you'll pay, you can use our stamp duty calculator.
First-time buyer stamp duty (England and Northern Ireland)
First-time buyers purchasing properties costing up to £300,000 don't need to pay any stamp duty, and those buying a property priced between £300,000 and £500,000 get a discount.
This means you could save up to £5,000. It works like this:
- Homes priced up to £300,000 - no stamp duty.
- Homes priced between £300,000 and £500,000 - stamp duty isn't payable on the first £300,000; 5% is payable on the amount over £300,000.
- Homes priced over £500,000 - you'll pay stamp duty at standard rates (see the 'home movers stamp duty' section below).
The graphic below shows how stamp duty works for first-time buyers:
Home movers stamp duty (England and Northern Ireland)
If this isn't the first property you've ever bought but it is going to be your main residence (eg you're selling your old house and moving to a new one), you'll pay standard stamp duty rates on any property that costs more than £125,000.
The amount of stamp duty you'll pay depends on the value of the property you're buying. Stamp duty is tiered like income tax, so you'll pay different rates on different portions of the property price.
The graphic below shows the different rates that apply to each portion of the property price.
- Find out more: stamp duty calculator
Stamp duty on second homes and buy-to-let properties (England and Northern Ireland)
If you're buying a second home or buy-to-let property, you'll be charged stamp duty on any property costing more than £40,000. You'll have to pay an extra 3% on top of the amount of stamp duty a home mover would pay.
- Find out more: buy-to-let stamp duty
Stamp duty in Scotland: LBTT
When buying a property in Scotland, you'll usually have to pay Land and Buildings Transaction Tax (LBTT). Like stamp duty, it's a tiered system where you pay different rates of tax on different portions of the property price.
First-time buyers don't have to pay any LBTT on the first £175,000 of the property price, while for home movers a 2% rate of LBTT kicks in from £145,001.
- Find our more: LBTT: Scottish stamp duty
Stamp duty in Wales: LTT
If you buy a property in Wales that costs more than £180,000, you'll have to pay Land Transaction Tax (LTT). Like stamp duty, LTT is tiered, meaning you pay different rates on different portions of the property price.
First-time buyers don't get an exemption under the Welsh LTT system.
- Find our more: LTT: Welsh stamp duty
Moving costs will vary depending on how much stuff you have, how far you're moving and whether you opt for extras such as professional packing.
The table below estimates the cost of hiring a van - which you should only consider if you have a relatively small amount of items - or using a removals company for different sizes of house, as well as getting them to pack for you.
|One bedroom||Two bedrooms||Three bedrooms||Four bedrooms|
|Hiring a van||£45||£100||Not recommended||Not recommended|
|Removals company, including packing||£500||£800||£1,020||£1,440|
Prices for van hire based on quotes from Hertz. Removals company quotes sourced from AnyVan.com in August 2019 for a move to an equal-sized property within nine miles.
- Find out more: how to choose the best removals company
Ongoing costs: insurance, bills and tax
Once you've moved in to your new home, there are regular costs you'll have to pay, too. We've explained this more comprehensively in our guide to the household bills you'll pay as a homeowner but here's a brief overview.
Buildings and contents insurance
It’s also a good idea to get contents insurance once you've moved in, to cover the cost of replacing your belongings if they get stolen or damaged.
Most companies offer combined buildings and contents insurance policies, which can make it easier to keep track of how much you're spending and renewal dates.
- Find out more: best and worst home insurance companies
Household bills and council tax
You'll need to budget for utility bills and council tax and should also set money aside for essential repairs and maintenance.
If you're buying a flat, you'll usually need to pay a monthly service charge and annual ground rent. You can find out more about these in our guide to buying a leasehold property.
Extra costs if you're also selling a property
If you're looking to buy a new home and want to sell yours at the same time, you'll have extra costs to take into account, such as estate agent fees.
- Find out more: the cost of selling a house