The Cost of Buying a New Home

A new home is probably to be one of the most expensive purchases you will make during your lifetime.

Besides the property itself, you will have likely heard of other costs you may incur. Whether you are a first time buyer, or you are just unsure about the costs of purchasing, here is our breakdown on what costs to expecting when buying a new home:

Mortgage fees

If you are obtaining a mortgage on your property, your lender will normally charge an arrangement fee; this is an administration fee which can cost up to £2,000 and varies from lender to lender.

This fee can be added to your mortgage or paid up front. A booking fee of around £100 can also be charged by the lender for securing a particular product or mortgage deal.

The lender will also need to carry out a valuation on the property and will send a surveyor to assess this; some but not all lenders recharge this to the borrower so be prepared to incur these costs which are based on a percentage value of the property.

Mortgage fees do vary depending on the lender, a mortgage adviser will be able to advise you on the fees charged by each lender before you make your application.

Mortgage broker and adviser fees

A mortgage broker or adviser will explain the most suitable mortgage type for you and are able to assist you in making an application.

They will also be able to provide advice on the mortgage fees for each lender. Although they are not essential and you can apply to the bank directly, brokers are particularly useful if you are unsure which mortgage you can afford and if you are concerned about your credit rating.

You should expect to pay around £500 for a mortgage broker although some do recover their fees from the lender directly so that you are not charged.

Many brokers offer a free no obligation consultation and your estate agent may also recommend using a certain broker.

Survey costs

Although your mortgage lender will carry out a valuation, it is advisable but not compulsory to get a full survey.

This will assess the condition of the property and highlight any issues with the property which may prove costly.

There are two types of survey, a home buyers report costs between £350 – £1000 again this is dependent on the value of the property and will cover the general condition of the property. A building survey can cost between £500 – £1300 and is a more in depth survey covering the buildings structure and is advisable for older properties.

Solicitor’s fees

You will need a solicitor to carry out the legal work for you. A solicitor will carry out searches which can cost around £200 depending on the area of the property. The solicitors costs itself can be in excess of £500 plus VAT and will normally depend on the purchase price of the property.

Stamp duty

If you are purchasing a property over £125,000 stamp duty is payable. The stamp duty is scaled and depends on the purchase price of your property:

Purchase price Additional Rate
up to £125,000 3% (except where the property is under £40,000)
over £125,000 and up to £250,000 5%
over £250,000 and up to £925,000 8%
over £925,000 and up to £1.5 millio 13%
over £1.5 million 15%
Removal costs

If you are moving from another property, you will most likely require help moving. It is worth enquiring with removal companies how much the move will cost you as this can vary depending on distance and amount of items.

Insurance costs

If you are purchasing with a mortgage, the lender will require buildings insurance is put in place before completion; this is separate to contents cover. Insurance companies offer competitive rates but it may be worth using a search provider to obtain a quote.

Get in touch

If you are thinking of purchasing a property, get in touch with our solicitors in Leeds, WakefieldBradfordManchester and London on 0113 2449931