The average first-time buyer puts down £61,090 according to Halifax, so it’s typically a huge sum. It’s natural to focus on saving a deposit.
But it’s only part of the picture. There are additional costs that can quickly add up, so understanding them early can help you budget more accurately and avoid surprises.
Stamp Duty: Depending on the price and whether you’re a first-time buyer, Stamp Duty can be one of the largest additional costs.
First-time buyers benefit from more generous thresholds and, in many cases, won’t pay anything at all. If you’re buying your first home, the current stamp duty rates are:
- 0% on the first £300,000
- 5% on the portion from £300,001 to £500,000.
If the purchase price is over £500,000, first-time buyer relief does not apply and standard stamp duty rates are used. They also apply to home movers.
The current standard stamp duty rates are:
- 0% on the first £125,000
- 2% on the portion from £125,001 to £250,000
- 5% on the portion from £250,001 to £925,000
- 10% on the portion from £925,001 to £1.5 million
- 12% on any amount above £1.5 million.
For example, someone buying a home for £295,000 (who is not a first-time buyer and owns no other property) would pay £4,750 in stamp duty.
Check what you’re likely to pay early on so it doesn’t come as a shock later in the process.
Mortgage fees: When comparing mortgage deals, it’s easy to focus on the interest rate. But the overall cost of a mortgage includes more than just the monthly payment.
Arrangement fees and incentives such as cashback all count too, and you need to add them into your budget. In some cases, a slightly higher rate with a lower fee can work out cheaper than a market-leading rate with a typical £1,000-plus fee.
Always look at the total cost over the initial deal period rather than just the monthly repayments.
Valuations and surveys: From structural concerns to damp or roofing problems, a survey gives you a clearer picture of the property and may help you renegotiate the price, request repairs or even walk away.
Remember that a lender’s valuation is a basic check, for their benefit, not yours (but you usually pay for it). Upgrading to a HomeBuyer Report, sometimes called a level two report, gives you a more detailed inspection of the property’s condition. It’s best for modern, conventional properties made from traditional materials, with no obvious defects or significant alterations, according to Countrywide Surveying Services, which was named Best Surveyor at the Your Mortgage Awards.
A full structural survey or level 3 report is useful for older, unusual or run-down homes. The surveyor will give you detailed analysis, including likely causes of defects and repair advice.
Legal fees and the conveyancing process: Buying a property involves legal work, from checking contracts to transferring ownership.
You’ll need a solicitor or conveyancer to handle this process, and fees can vary depending on the complexity of the transaction.
There may also be additional costs, such as local authority searches or Land Registry fees. Ask for a full breakdown upfront so you know what to expect.
Conveyancing on a typical property, including fees, is likely to be between £1,000 and £1,500.
Insurance and protection: Before you complete on a property, your lender will normally need you to have buildings insurance in place. This protects the structure of the home against risks such as fire, flooding or storm damage.
Many buyers also take out contents insurance or a combined buildings and contents policy, at an average cost of £391 a year.
Life insurance isn’t compulsory but is highly recommended, especially if you have dependants. Costs can vary depending on your circumstances and how much you need to cover.
Not only does life cover pay out if you die, but many policies offer added benefits for policyholders. With Aviva, which won Best Life Insurance Provider at the Your Mortgage Awards, you can get 24-hour access to digital GP consultations and mental health support as part of your cover.
Critical illness cover is also worth considering. According to LV=, which was awarded Best General Insurance Provider at the Your Mortgage Awards, it pays out a lump-sum to you or your beneficiaries if you are diagnosed with a life-changing illness or injury. Costs vary depending on your age, health and amount covered.
Moving costs and initial expenses: The cost of moving home can vary depending on how much you have and how far you’re going.
Hiring a removals company, paying for packing services or arranging storage can all add to the total – expect to pay around £1,300. Even if you move yourself, there are still costs like van hire and fuel.
Once in your new home, there are expenses too. Furniture, appliances, redecorating and small repairs can all add up. Set aside a buffer for these early costs, rather than assuming everything will be ready to go on day one.
Ongoing costs after you move: You’ll need to budget for ongoing costs such as council tax, utilities, maintenance and potentially service charges or ground rent.
If you’ve stretched your budget to buy, these regular outgoings can feel more noticeable. That’s why it’s important to factor them in when deciding what you can realistically afford.
Plan ahead
Planning for these costs from the outset can help you budget more accurately and avoid expensive surprises later on.
The more prepared you are, the smoother the buying process is likely to be.
