Buying a home is a major life event that comes with several financial considerations beyond the purchase price. It is important to consider all the costs involved before taking the leap into homeownership or moving house to avoid any surprises or unexpected expenses down the line. Here are the major costs you should be aware of when buying a home in the UK.

A deposit is the initial payment you make towards the purchase of a property. It bridges the gap between the cost of the property and how much your mortgage company is willing to loan you. The amount required will depend on the value of the property, but typically, you'll need around 5-10% of the purchase price. The higher the deposit you can afford to put down, the better your chances of securing a mortgage and getting a lower interest rate.

SDLT is one of the main financial considerations when looking to purchase a property. It is a tax paid to the government for buying a property over a certain price threshold. Currently, in England and Northern Ireland, the threshold is £250,000* for residential properties, so if you purchase under this threshold, no SDLT is payable. For FTBs, the threshold is higher at £425,000 on any property worth £625,000 or less. The amount of SDLT you pay will depend on the purchase price of the property, and rates vary depending on the value. For example, if you buy a property for £300,000, you will pay £2,500 in SDLT.

Conveyancing is the legal process of transferring ownership of a property from the seller to the buyer. Conveyancing fees include 1) the cost of hiring a solicitor or licensed conveyancer to handle the legal aspects of the sale and 2) the disbursements which include various local searches and registering the change of ownership with Land Registry. The cost of conveyancing fees can vary depending on the value of the property, whether it is freehold or leasehold and the complexity of the sale. On average, you can expect to pay anywhere between £500 and £1,200 for conveyancing fees.

Mortgage valuation fees are the costs associated with having your mortgage lender value the property you are purchasing. This is to ensure that the property is worth the amount you are borrowing. The cost of valuation fees can vary depending on the lender, but typically range from £0 to £500.

Mortgage fees include the costs associated with arranging your mortgage and the amount you pay will depend on your lender and the type of mortgage you are applying for. Be sure to shop around and compare different mortgage options to find the best deal for you. Mortgage arrangement fees can range from a few hundred pounds, up to 1% of the mortgage value and may be payable upfront or added to the cost of your mortgage, allowing you to pay it back over the duration of your mortgage term - though in this case, interest will apply.

A survey is an assessment of the property’s condition and is typically required by your mortgage lender. The cost of a survey can vary depending on the type of survey you require, but on average, you can expect to pay between £250 to £1,500. Some home buyers may think that a survey adds another unnecessary layer of cost to what is an already expensive transaction. But would you buy a car without its MOT or service documents? A survey provides reassurance that the property you are purchasing is in good condition and if any potential issues or defects are identified that could be costly further down the line, this information can be useful when it comes to negotiating on purchase price. 

Don’t forget to factor in the cost of moving. This includes hiring a removals company or renting a van, as well as any other associated costs such as packing materials and insurance. The cost of moving can vary depending on the distance you are moving and the amount of belongings you have. Professional removals companies can cost anywhere between £500 to £2,500 depending on the size of property you are moving from (ie. how many possessions or furnishings you have) and the distance you are moving. 

Estate Agent fees
Lastly, if you have a property to sell and you do it via an estate agent, you'll need to factor in their fees and/or commission. Estate agents can charge anywhere from 0.9% to 3.6% of the agreed selling price of your home. Based on home worth £250,000, you could be be facing an agent's bill of c£9,000 so it really does pay to think carefully about whether you could sell through a platform such as Agreed.co.uk where you can list your home on Rightmove or Zoopla from just £9.99 a week, with no fees or commissions to pay. 

Buying a home in the UK comes with numerous costs beyond the purchase price. It is important to factor in all these costs when budgeting for your new home to ensure that you can afford the entire process. Be sure to shop around and compare different options to find the best deals for you and consider seeking advice from a financial advisor to ensure you have a full understanding of the costs involved. With careful planning and budgeting, you can make the path to your dream home a smooth one. Happy moving!