What Costs Should I Expect When Buying a House?

You probably already know that purchasing a home is a pricey endeavour, but if you’re wondering about what costs money, and how much, you’re not alone. From Stamp Duty to running costs, we’ll break down some of the common fees, taxes, and charges related to a home purchase. This is just for the buyer’s side, however; check out our other guide about common costs associated with selling a home.

Costs before making an offer

These are the ones people often forget about; it’s not free to fill up the car with petrol or take time off work to attend viewings. You may need to put money down on a property to secure your interest, but then change your mind afterwards, losing that deposit. Plus, the stress of the property hunt may damage your mental or physical health, leading to more downtime and delay. Lastly, you may hire a solicitor to look over agreements and sample contracts before even making an offer, at no small fee.

The house you pick will have a huge impact on costs, too. Investopedia says, “when considering the affordability of a home, first-time buyers need to consider the condition and size of the property. After all, large isn't always good, especially if heating and cooling it breaks the budget. A quaint home sitting atop a picturesque hill may be a dream come true, but shovelling that long, steep driveway during the winter months could be a costly nightmare.”

Costs before move-in

These are the heavy hitters. For mortgage fees and charges, expect up to £1.5k in cost. For a valuation, budget up to £700. You’ll need a property survey, which can go as high as £1.5k, then you’ll need to get your conveyancing done, which is on average £780 – and that doesn’t include any enhanced searches done as part of the discovery. Lastly, you’ll need to clear the property of any hazards, and removals run between £50 and £1.5k in price. All this is according to Which? a trusted name in money advice. There will also be mortgage fees of up to £2.5k, and before you consider adding them onto your mortgage, remember you’ll be paying interest on them for years if you do.

Costs after you move in

If you’ve got a leasehold, you’ve got ground rent and service charges to contend with. These can vary widely and increase over time. You’ll need to pay to redirect your mail from your old address for a while at around £75 a year. You’ll have running costs from day one – you can’t live comfortably without gas, electric, water and the internet – and there will probably be repairs, too. While the house survey would have caught the most serious issues, you’ll likely need to do at least a few small repairs once you’re settled. MSE calculates the average cost of this at nearly £6k. They also state, “the lender will require you to take out buildings insurance to protect your new home against damage from fire, floods, subsidence and anything else. It’s also a good idea to have contents insurance for all your possessions, and life insurance to pay off your mortgage should you die before you’ve repaid the entire amount.” Oh, and we can’t forget about council tax. This can be thousands of pounds, but monthly payment plans can help you spread the cost out over the year.

Other costs that might apply

Ever thought about the extras that might apply to your particular circumstances? These can include things like:

• Pet kennelling or care for moving day
• Childcare for moving day
• Repairs or renovations needed to accommodate children or pets
• New furniture for your home
• Increased fuel costs if amenities, school, friends, family, church or work are further away
• Legal costs to prepare any tenant agreements for non-owning partners
• House removal insurance if you’re moving yourself
• Professional cleaning costs, especially if moving from a rental property
• Pest control costs at your new home
• Storage costs if you’re not bringing all your belongings with you
• Food delivery or takeaway costs on moving day
• Parking charges until you get residential permits
• TV license charges (if you watch TV)
• Boiler insurance or other bespoke insurance products you may want
• Loss of your rental up-front deposit if there were issues with its returned condition
• Cost of learning to drive, buying and insuring a car if your commute is not accessible by public transport

How can you prepare?

With any large purchase, it’s great to maintain a budget. Put all these costs down as line items (if they apply to you). Then, as you prepare for your house-buying journey, make sure you have enough resources to cover these costs. Remember that some costs are up-front, while others are post-sale, so you can account for that in your financial planning. If you don’t have enough right now, take some time. Save up a little more and revisit your budget. Is there anywhere you can save by doing it yourself? Can you cut out some nice-to-haves?

Wealthsimple says, “if you’re putting your down payment fund in the same place where you pay your rent and your bills, you’re going to see way more money coming out than staying in, no matter how hard you try to discipline yourself. Commit to a savings account or an investment account where you’ll contribute a set monthly amount plus anything else you can afford, and then literally just… forget about it. Deny it even exists.”

How can you keep track of costs?

Reuse your budget for this. Simply make a copy of it and use it to track your actual spend; you’ll see that some line items will cost more than you accounted for and some will be less. By tracking every single conveyancing fee or tax you pay, you’ll keep that spending in line with what you have saved up. Sometimes just keeping an eye on outgoings will provide you with more opportunities to cut out unnecessary costs.

If you’re starting your home-buying journey, you need a good conveyancer. That’s where we can help. Use our free and easy tool to get conveyancing quotes from local experts today.

What Searches are Done During Conveyancing?

If you’re starting your home-buying journey, it’s likely you have questions about conveyancing. How long will it take? What searches are done during conveyancing, and how will they affect you? Don’t worry – we’re here to shed some light on the process. First off, we’ll start with a quick overview.

How conveyancing works

When you want to buy a property, you’ll want to find a solicitor or conveyancer. They will help you complete the legal transfer of the property to you. Once you appoint a conveyancer, they will run searches on your behalf. They’ll also advise you of any costs you might expect to pay, like Stamp Duty, and then they’ll pay those fees on your behalf (which you’ll reimburse) and update the Land Registry. It can be costly, of course. With the average conveyancing fee in the UK around £850 – which increases the more expensive the property – it’s important to shop around. We can help with that. But don’t be tempted to undertake conveyancing on your own. There are a load of costly problems you could overlook simply due to lack of experience. Perhaps the land next door is zoned for a recycling plant, or there’s an existing boundary dispute. Maybe the planning permission that was promised is actually still just pending. You don’t want to be caught out, so make sure to hire the most experienced conveyancer you can find.

Conveyancing searches

The cost of these searches may be charged back as a separate line item, so be sure to check first. However, they’re vital in keeping you from making costly buying errors. You could categorise searches as legality and hazard checks. Some ensure the seller is permitted to sell to you, and others make sure there’s nothing environmental that should prevent the sale. Common checks are:

• Local authority searches – These checks will ensure there are no current or future plans that should concern a buyer. This could include checking for waste disposal, gas, motorway plans, mining, public paths, pipelines, common land, noise levels, traffic calming measures, and networking.
• Flood risk – While this can be combined with an Environmental Search, it is recommended as a bare minimum that you ensure you’re not purchasing a home in a flood zone.
• Title check – Completed with the Land Registry, these documents prove the seller has the right to sell. A conveyancer must check the Title Register and Title Plan to proceed with the sale.
• Water Authority – This will help you get info about public drainage and water supply, which can be a vital aspect of planning permission for external building works.
• Chancel repair check –This search checks that a buyer won't be liable to pay for the maintenance of the local church, a practice that dates back to the 16th century and Henry VIII's establishment of the Church of England. Some homes are subject to a liability to contribute towards the costs of maintaining and repairing the local parish church. Have a chancel check done to prevent having unexpected costs down the line.
• Environmental searches - Done by Landmark or Groundsure, you’ll get info about any contamination, landfills, flooding, radon gas, stability, industry, and any other related environmental issues that would affect your purchase. It’s highly recommended, as some issues prevent residential occupation.

What are the risks of not completing searches?

In a word? Devastating. If contamination is ever found and the original culprit can’t be located, you’ll be on the hook. You may be unaware of high levels of radon gas which require expensive abatement, or you’d miss the opportunity to object to a planning permission request for an overlooking extension or rezoning of a neighbours property into a care home. According to ORJ Law, “it is important to establish whether the property is at risk of flooding, since this can have an adverse impact on insurance premiums, mortgage-ability and property value. If the search reveals a high risk of flooding in the area, enquiries should be made of insurance companies to see if any concerns are raised prior to purchasing the property. The unprecedented flooding and evacuation of properties in York in December 2015 highlights the need for detailed flood information to be obtained prior to a property purchase.” Searches are very important to convey the long-term durability of your investment. In fact, many lenders require a variety of searches before they’ll give you a mortgage, so check with your lender about their policies.

How long does the process take?

In general, expect the process to take 8-12 weeks to complete. This is because of the volume and detail of searches required. The time frames for common searches are:

• Varied for local authority searches. This depends on how busy your local parish is. They could take anywhere from a few days to a few weeks.
• Water, drainage, and environment results should be returned to your conveyancer within 5–10 days of application.
• A chancel search can be as quick as 24 hours.
• The title check can take around 2-3 weeks to complete.

Contracts are usually exchanged around week 8, and completion follows shortly after. Completion day will happen on the completion date agreed by the conveyancers when the contracts are exchanged. The time between the exchange date and the completion date will vary depending on the type of transaction, the personal circumstances of the parties involved and the size of the chain. Completion day is usually 7-14 days after the date of exchanging contracts.

Remember not to get married to this timeline, however; your conveyancer may find some concerning results in the searches and request follow-up information. In the end, these checks are there to protect you, so you want them to be detailed. It’s important to use a conveyancer who has a wealth of experience completing purchases. They’ll know just what checks to advise for your specific situation. And if you need help finding an expert conveyancer, just use our quick and easy tool.

What is the Difference Between a House Survey and Valuation?

If you’ve found the home of your dreams, you’re probably navigating tons of odd new terms like ‘conveyancing search’, ‘staircasing’, ‘house survey’, and ‘valuations’. It’s almost a whole new lexicon that you must get used to in a very short amount of time. Fundamentally, what is the difference between a house survey and valuation? Don’t they tell you the same thing? You might think so, but you’d be miles off. We’ll break down both products in full detail below for you.

What is a house survey?

Also known as a property survey, a house survey checks the condition of the home and land. It can warn you of any worrisome and hidden issues like subsidence or roof problems. While it’s not mandatory, it is strongly suggested; failing to uncover serious complications with your prospective home can have knock-on consequences for years to come. Home surveys cost £400-£1.5k on average, and most contain a valuation as well.

You should look to have a house survey done by a local surveyor, as they’ll know more about the common issues in the area and elements to watch out for. Look for a surveyor who is part of the Royal Institute of Chartered Surveyors (RICS) for more confidence in their abilities. If you’re buying a converted church or another unusual home, try to find a surveyor with expertise in that sort of structure. Lighthouses, warehouses, and castles all have bespoke issues that can occur, so you’ll want that experience guiding you.

What is a valuation?

A Valuation Report is an inspection and report of a property that will determine its value, commonly referred to as a Valuation Inspection and Report. It’s important to note, this is not a survey and won’t inform you of any structural damage to the property. A valuation report gives an indication of the value of the property and so it can be widely applied to all property types. The valuation report will look at the condition and location of your house to provide an estimated value. It’s carried out by a RICS registered property surveyor and is designed to help you set the price of your home for selling. It costs between £300-£700 and is around 2-3 pages in length.

This is not the same thing as a mortgage valuation. Your lender will require one of these to determine what they’re willing to lend you for that specific property when looking to buy. Also, if you’re selling, an estate agent may offer their Estate Agent Valuation to help you set the price of your home on the open market. This is advantageous because their local knowledge can enable you to get more in a sale than you would from a valuation-based price alone.

So, what’s the difference?

At the core, valuations don’t flag hidden issues – they’re only looking at if the construction is traditional, if there are any obvious signs of damage, and if the floor plan details are accurate. They’ll note its comparison to other local homes, too. To be clear, a property survey is optional. But they can help you avoid expensive and unwanted surprises, like an unexpected rewiring job, as well as giving you peace of mind by telling you that those hairline cracks don’t mean the house is falling down. Given the hundreds of thousands of pounds it costs to buy a property, a few hundred pounds on a survey to have the reassurance of an independent, expert surveyor looking over it feels like a good investment. With the information from the survey, you might reconsider whether to buy the property or use the unbiased information you have to renegotiate the price. If you find for example it needs £15,000 for roof repairs, it is reasonable to ask for £15,000 off the price. Alternatively, you might ask the seller to fix the problems before you buy.

Do I need a property survey on a new build?

There’s actually a special property survey for that; it’s called a snagging survey, and it’s great because, according to HOA, it will help you:

• Highlight any issues in the property that fall short of the warranty standards
• Highlight any breaches of building regulations or any other statutory technical guidance
• Identify works which are outstanding
• Identify where traditional custom and practice within the industry have not been met
• Provide guidance prior to or post completion of the property as to any outstanding issues requiring remedial works

You can have it done before or after completion, but it’s always recommended to have a snagging survey completed within the first two years so the developer can remedy any issues. You don’t want to be on the hook for repairs they’ve caused years later.

Finding a surveyor and attending site

You’ll want to visit the property with your surveyor. Sometimes when you read a report, you don’t capture the nuance of issues. By being present on the day, you’ll gain first-hand knowledge of the surveyor’s concerns. You can flag any specific worries you have and ask questions when something gets highlighted. Always get your own surveyor by fielding quotes from comparison sites. Using a surveyor provided by your developer or lender may cost you more or they may be biased. For the best standards of surveying, look for an MRICS or FRICS after your surveyor’s name. Oh, and before you appoint anyone, make sure to see a sample report – you’ll want to be sure you understand the information they’re going to produce for you. If it’s full of caveats or tough to decipher, find another quote. Why? Well, you’re paying good money for this survey. You need to understand it well to prevent making a poor financial decision.

When finding a surveyor, it’s critical to shop around. That’s true for your conveyancer, too. When you get to that stage, why not try out our free tool? We’ll help you compare quotes from loads of local conveyancers quickly. Click here to submit your request today.