How much does it cost to buy a house or another property today? The answer: it depends. From estate agents fees to moving fees, I’m afraid you will need to open your wallet or purse at some point. Buying a new property can be even more expensive than you might expect, so read on to make sure you don’t get any surprise bills.
The cost of buying a new home is likely to be one of the largest amounts of money you will spend, and while this is largely due to the deposit, you should be prepared for other expenses too.
Buying a property: The deposit cost
When we talk about “deposit” in the property world, this is usually referring to the amount of money you have to put towards the purchase price over and above the mortgage advance. The standard conditions of sale which are incorporated into the majority of residential property transactions require that a deposit of at least 10% of the purchase price be paid on exchange of contracts.
It is also to show ‘good intention’ to buy the house/property and to give the seller protection if the buyer withdraws from the conveyancing transaction.
Buying a property: Stamp Duty
Stamp Duty Land Tax (SDLT) is a progressive tax paid when purchasing a freehold, leasehold or shared ownership residential property in England, Northern Ireland and Wales (separate Land and Buildings Transaction Tax in Scotland).
HMRC stamp duty was abolished for the first time buyers on properties up to £300,000 (Reportedly benefiting 95% of first-time buyers who pay stamp duty). First-time buyers of homes worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000 but will pay the normal rates of stamp duty on the price above that (Saving £1,660 on the average first-time buyer property).
If you are a first-time buyer and you are purchasing a property for more than £500,000, then you will not be entitled to the discounted rates. For fees examples, you can use this Stamp Duty Tax Calculator.
Buying a property: House valuation cost
Decided to get your property valued but not sure how much it costs to get the valuation of your house done? An accurate estimate of property value, based on an expert’s report, gives the owner the opportunity to request a substantiated price.
It is recommended that an owner not to set the price of a home on his own but to use the services of a professional valuer.
Love Your Postcode is a modern, performance focused estate agent offering all the services a traditional estate agent does, house valuation included, but better. Our aim is to leave you with more of the sale, saving you a huge amount of money in the process and achieving a higher selling price.
Since we want to make you have a profit from the property selling process, our property valuations are free of charge.
Buying a property: Surveyor cost
This is an important step so you understand if there are any problems before you buy. However, if your bank is already conducting a survey as part of your mortgage application then that will usually be sufficient. Banks are particularly thorough in their checks as they are investing a lot of money into the transaction.
Buying a property: Estate agent fees
Estate agents commissions and contract terms vary from agency to agency. Commonly, estate agents charge a percentage fee, which can be anywhere between 0.75% and 3.0%+VAT of the agreed selling price for your property.
However, if you are buying a property there will likely be no estate agent fees involved for you. But bear in mind that you’ll normally need a solicitor or licensed conveyor to carry out all the legal work when buying and selling your home.
Buying a property: Removal costs
Moving house can be one of the most stressful life events around. It’s often chaotic, emotional, exciting and exhausting all at the same time. Removal companies can stop moving house becoming overwhelming, but they do have a cost.
Collect estimates from moving companies, and create a moving budget. Before hiring a removal company, ask neighbours and friends for recommendations.
Once you have chosen your removal company and received a price quotation, arrange a visit so they can see how much you have to move and if there are items that require special handling. This is also a good time to give them info about your new home address so they can find out about parking and arrange access.
Buying a property: Home insurance
It’s important to have property insurance in place from the day you exchange contracts on your new home. The amount that you have to pay for home insurance will generally depend on factors such as the size of the property, its location and how much cover you want for your possessions.
Read our article about the difference between flat and apartment.