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The hidden costs of buying a home

Posted 9 September 2015 by Keith Osborne

Additional costs could add 10% to your homebuying bill - are you prepared for them?

Despite the relative success of the Help to Buy scheme and the hope surrounding the Help to Buy ISA, finance still remains a significant barrier facing prospective homeowners hoping to step on to the ladder, with many finding themselves pushed to their financial limits in their attempts to purchase a home.

Unfortunately, this can sometimes lead to buyers overlooking the range of extra costs involved beyond the purchase price. In total, these costs could add anything up to 10% to your total bill, so they need to be carefully factored in to your budget in advance.

Stamp Duty 

Stamp duty is a tax charged on all property purchases over £125,000, and is usually the largest additional extra expense to consider when purchasing a home. Last December, Chancellor George Osborne announced an overhaul of the stamp duty system, putting an end to the 'slab' method where fixed amounts of tax were charged at certain thresholds. Under the new system, a buyer purchasing a family home for £275,000 will save £4,500, but will still be faced with a bill of £3,750.


Conveyancing is the legal process of buying and selling a property, and includes registering the transaction with the Land Registry and conducting searches. Quotes vary significantly, with online conveyancers offering packages from around £700 for a £250,000 property. Solicitors also offer deals, but tend to be more expensive.


Surveys help you learn about the condition of building, and alert you to any significant problems which may make it necessary to renegotiate the purchase price or pull out altogether. There are three main types of survey - a condition report, homebuyer's report and a buildings survey. A condition report will cost you around £150-£300, while a buildings survey is generally priced in the region of £500-£1,000. 

Mortgage arrangement fees

An arrangement fee is paid to your lenders to set up the mortgage. These fees vary significantly, and can average around £1,000. You can usually choose between paying this fee upfront or adding it to the mortgage. Some lenders charge a percentage of the loan rather than a flat cost, so it is vital to assess all of your options.


If you're moving down the road from your current home, you may be able to enlist the help of some friends to help you out. Moving your belongings long distances between family homes, however, is more complicated. Hiring a professional removals firm can cost from a few hundred pounds to well over £1,000 depending on your circumstances, so ensure you shop around to get the best deal.

Furniture and White Goods

You've bought the house, and now you need to fill it. Ensure that you know which white goods (if any) you will need to purchase, as these can eat up a sizable chunk of your budget.


Keep some cash aside for any unexpected repairs and improvements, as very few homes need no work at all. Indeed, most new homeowners spend significantly more than they initially plan on doing up their new property, so don't stretch yourself to the absolute financial limit before you move in.


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