Life in the UK

The costs of buying a property in the UK

If you’re planning to stay in the UK permanently and are considering buying a property, then it’s important to factor in all the upfront costs, mortgage costs and ongoing costs of buying a property in the UK.

Here we’ve listed some of the key costs for you to consider when planning your budget.


Upfront Costs

Deposit

A deposit is the amount of money you put towards the cost of purchasing your property. Having a decent deposit amount is important and may help you get a better deal. 40% is usually the optimum deposit, which gives you some of the best rates that mortgage lenders offer.

Stamp Duty Land Tax

If you buy in England and your chosen property costs more than £125,000, you will have to pay Stamp Duty Land Tax (SDLT). However, if you are a first-time buyer then you don’t have to pay any SDLT on a property up to £300,000. The amount you pay depends on the value of the property and is worked out on a percentage of the purchase price.

Valuation Fee

A valuation fee is to assess the value of the property to determine how much the mortgage lender is prepared to lend you. The cost could be between £150 to £1,500 depending on the value of the property.

Surveyor’s Fees

Before committing to a purchase, you need to know that the property is in good condition. Without a survey, you may not be aware of the work that needs to be done and how much this may cost.

Legal Fees

You will need a solicitor or licenced conveyancer to carry out all the legal work involved in buying a property. They will also do local searches.

Electronic Transfer Fee

An electronic transfer fee covers the lender’s cost of transferring the mortgage money from the lender to the solicitor, it usually costs £40-£50.

Broker Fees

Brokers act as an intermediary between the customer and the lender. They can advise on the products of a number of lenders in the market, saving the customer from having to visit numerous lenders separately. Some brokers may charge a fee.

Removal Costs

These costs will vary depending on how much you have to move and over what distance. Generally, removal firms charge more for moving at weekends.


Ongoing Costs

Insurance

Mortgage lenders require the mortgaged property to be insured. This is to protect their interest in the property. It could also be a good idea to look into taking out contents insurance to protect your belongings. You should check that you have the right protection should the worst happen. To protect your family you may want life cover to ensure that the mortgage is paid off should anything happen to you before the end of the loan. 

Council Tax

In England and Scotland, the amount you pay in council tax is based on the valuation band which your property falls under, as well as its location and whether or not you are entitled to a discount. Northern Ireland properties are taxed on an individual basis.

Utilities

Asking the current homeowner what they spend on utilities such as electricity, gas and water can help you estimate your monthly utility costs. You also need to factor in costs for line rental, calls, broadband, and tv.

Maintenance and Repairs

Your survey should have highlighted any expected costs involved with necessary repairs, but you will need to budget for regular decorating and DIY.


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