Calculating the cost of buying a house


Buying a house is one of the most important things a person will do in their life and it is likely to be the biggest financial outlay in their life. This is why it is vital that people fully understand the implications and total cost of buying a house. The listed price of a property will always be the factor that people focus on, but there are many other costs associated with buying a house.

Consider the upfront costs when buying a house

There are a number of upfront costs involved with buying a house, including:

  • The deposit for the property
  • Stamp duty
  • Valuation fee
  • Surveyor’s fee
  • Legal fees
  • Electronic transfer fee

The deposit for the property is crucial because the larger your deposit, the smaller the mortgage you need to obtain. If you have a notable deposit, you should find it easier to obtain a mortgage. This means you should look to save as early, and as much, as you can. There has been a growing availability of mortgages which only require a 5% deposit and there are Government backed schemes which can help to boost your savings figure.

Stamp duty is a tax imposed on property purchases over the value of £125,001. There a number of bands to consider which means that the more expensive the property, the higher the rate of stamp duty you’ll be required to pay.

Most mortgage lenders require the property to be evaluated to determine the amount of money they are willing to lend you to buy the home. The cost of a valuation can range between £150 and £1,500. Not all lenders charge for this service but many do, so make sure you are aware of this requirement. This valuation will not provide insight into work or maintenance that needs to be carried out at the property and should not be considered as an extensive survey.

You need to be confident in the condition of your home

It is important that the property is reviewed by a professional to highlight any issues or potential problems before you decide to buy it. There is a range of surveys on offer and if you are buying an older property or a property which looks as though it could be in poor condition, it makes sense to opt for the more detailed survey. The types of property surveys are:

  • Condition Report
  • Home Buyers Report
  • Building survey

There will also be legal fees associated with buying a home when you employ the services of a solicitor or conveyancer. You should check what legal fees your solicitor charges and what they include for this price. You may find that they charge extra for local searches (at a cost of around £200 to £300) and electronic transfer fees (up to £50).

The mortgage lender may also charge a fee for their services.

Given that the property buyer will have a lot of outlay at this point, they need to make sure that they are covered for all of their costs. This includes the cost of moving into a new home. Whether this is carried out by a professional moving company or you hire vans to do the job yourself, this is another cost to bear at an expensive time.

Ongoing costs

While the vast majority of outlay in buying a home is paid up front, you also need to be aware of ongoing and monthly costs associated with buying property. This is why it is vital to draw up a budget and make sure you have sufficient funds every month to meet these costs. Costs to consider include:

  • Mortgage payments
  • Home insurance
  • Council tax
  • Furnishing the property
  • Leaseholder or factor costs

These are all costs that have to be paid and depending on your property purchase and circumstances, these could add up to a considerable sum.

Buying a home is an exciting time and it can provide people with the security and comfort they require, but it is a costly experience. It is essential that you are aware of the costs associated with buying a house and them maintaining the property.

Your privacy and our use of cookies

Read more about cookies and learn how to disable them.