No doubt the biggest obstacle to getting on the ladder is a deposit. It feels awesome when you’ve finally got together enough dollar to get your own place. That’s why it’s such a kick in the teeth when you start looking at the additional upfront costs of buying a house, and a massive wallop in the groin when you realise you’ve underestimated this (if you do like we did…)
From my casual Googling, I estimated that we’d end up spending £2,000 – £2,500 on stuff like solicitors’ fees and stamp duty – WRONG. It’s gonna vary depending on the place your buying and how many things go wrong in the process, but from our experience, content online significantly understates the added costs of buying a house. So, to help you prepare better than we did, here are all the costs that we had to fork out for when we bought our place.
Homebuyer’s survey – £245
This is the mid-level survey which involves a surveyor having a good nosey around the property to check for things like damp, structural issues and ultimately give you an overview of the property’s condition. It cost us £245 which is actually very reasonable as we went through our mortgage provider – it’d normally closer to £400/£500 for a house like ours. If you’re getting a mortgage you’ll need to get at least a basic survey done as your mortgage lender will want proof that the property they’re lending you money to buy is in good condition and worth the amount that you’re buying it for.
Structural survey – £372
Off the back of our homebuyer’s survey, a crack was found which our mortgage lender wanted us to investigate further with a detailed structural survey. Not a cost we were excited about paying but it needed to be done before we could borrow any money. If you want to know more about this saga you can read about it here.
Drainage survey – £210
Our lender wasn’t happy with the structural survey results which meant they wanted a drainage survey doing to check the condition of our drains. Certainly not a cost we were expecting but again, we were keen to press on as the house was exactly what we were after and at a good price. Thankfully, the drainage survey came back with no issues and so we could crack on (excuse the hilarious pun) with getting our formal mortgage offer.
EICR (electric condition report) – £168
We learnt from the estate agent that the electrics hadn’t been looked at in over a decade so we thought it’d be wise to shell out for a condition report. If no work needed doing then great, if it did then we could ask for it to be taken off the price of the house.
Boiler service – £55
Same logic as the EICR – it came back all good.
Solicitor fees – £1,595
Solicitor/conveyancing fees will vary depending on the cost of the house and any additional work the solicitor has to do eg: £100 ‘processing fee’ for our lifetime ISAs. We ended up going for a fairly expensive solicitor as they came very well recommended so it doesn’t have to cost this much.
Mortgage fees – £35
The mortgage that we opted for had a £495 fee which we opted to add to our mortgage payment (worked out about £2 a month over 35 years!) so the only mortgage-related cost we had to pay upfront was the £35 CHAPS transfer fee.
Stamp duty – £750
When we bought, Boris and his cronies were all about giving first time buyer a leg up onto the ladder so luckily, the first £300K of the cost of our house was ‘stamp-duty free’. Our place cost £315K so we had to pay 5% stamp duty on the £15K over the threshold = £750. If this incentive wasn’t in place we’d have had to fork out £5,750 in stamp duty alone!
Total cost excluding deposit
Without factoring in our deposit, the total upfront cost of buying our place (a pretty modest 3-bed semi) was an eye-watering £3,430. It could certainly be cheaper than this, but equally if more things go wrong then it could well be more.
Total costs including deposit
As we both had lifetime ISAs, we got a 25% bonus on our deposit funds which meant that our savings of £25,200 + bonus equated to a total deposit of £31,500. This was a 10% deposit against the £315K purchase price. We feel very lucky to have bought during a period that the government has getting first time buyers on the ladder high on their priority list as it ended up saving us a shed load.
So the total upfront cost including the money that we contributed to the deposit came to £28,630. There’s a breakdown of all the costs at the bottom of this post to help you prepare financially, mentally, and emotionally.
So there you have it, a very large number of pounds. I wish I’d read something like this before launching into our property buying journey as the unexpected costs would have hit me less hard. The non-deposit upfront costs equated to 12% of our total cost including deposit so it really is worth taking into account!
|EICR (electric report)||£168|
|House deposit (excluding LISA bonus)||£25,200|
|Total upfront cost||£28,630|