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Looking to get on the property ladder in 2018?

buying a home

Check out these hidden costs of buying and running a home

Investing your time and money into a property is usually money well spent as the property will likely increase in value over time. However, buying a property does demand significant financial commitment - a commitment that continues for the entire time you own the property.

Buying a home involves more than just the actual cost of the property. There are other costs to take into account when considering whether you can afford to get on the property ladder, including:

The hidden costs of buying a home:

  1. Stamp duty
    Stamp duty is a government tax and the amount you pay depends on the value of the property being purchased. The good news for first time buyers is that stamp duty has been scrapped for properties valued up to £300,000.
  2. Deposit
    The greater your deposit the better your chance of getting a good mortgage deal. Mortgage lenders typically want at least a 5% deposit.
  3. Legal fees
    The solicitor you instruct to carry out the legal aspects of buying your new property will charge fees for the work undertaken, which include drawing up contracts and ensuring local searches are done. Fees vary, though most conveyancing solicitors are competitively priced. Look to engage a solicitor that is committed to keeping you up-to-date with the progress of the sale and that prioritises customer service.
  4. Removal firm
    Depending on the amount of stuff you have, you may need to hire the services of a removal firm. Fees vary depending on the level of service you require.
  5. Mortgage fees
    Mortgage fees can soon add up and should definitely be budgeted for. Fees you could be facing include an arrangement fee, booking fee and a valuation fee.
  6. Furniture
    If you are moving to a bigger place or moving from a part-furnished home you will likely need new furniture. Costs will vary depending on what you need. Shop around for deals and be sure to measure rooms and spaces before you order to avoid purchasing something that doesn’t fit.
  7. Insurance
    Your solicitor will likely insist that you have buildings insurance from the moment the property becomes yours - protecting you against fire and flood.
  8. Postal redirection
    The Royal Mail will redirect your post to your new home for a set period of time, for a fee. This gives you time to contact everyone who needs to know that you have moved without the worry of missing important mail.

And of course, once you are in your new home, there are the running costs to consider. If you have been renting a property the costs of running a home won’t come as too much of a shock, however, if this is your first time keeping a home, bear in mind these costs…

The hidden costs of home ownership

  • Decorating
    While you may love your new home, the décor inside may not be to your taste. Depending on your DIY skills you can save cash by doing the work yourself.
  • Bills
    From home insurance to broadband, council tax to water rates, property ownership comes at a price. When viewing a property ask the current owner for a rough idea of costs, such as the council tax band, and then work out your budget accordingly.
  • Maintenance
    In properties of all sizes and ages, things go wrong – usually at the most inconvenient of times! While your survey should have highlighted any major issues, over the years things will breakdown and need repairing or replacing. Maintaining your property may also include other regular costs such as a window cleaner and gardener.
  • Leasehold costs
    If your property is a leasehold you will incur annual costs. Ground rent and service charges vary in amount from property to property and it is important you take these into consideration when working out whether you can afford the property you are interested in.

If property ownership beckons for you in 2018, be sure to go through your budget beforehand, working out what you can reasonably afford while still leaving you money to enjoy your lifestyle.

Highly experienced in handling all aspects of conveyancing, our team are on hand to help you negotiate the world of property buying. And with no hidden extras, you can budget in confidence, knowing that the price we quote is the price you’ll pay.

Call 0330 123 1229 to find out more.