How much does it really cost to buy a property?

April 19, 2016 by Brendan O'Neill

Home owners

When buying a new home, it is relatively common to factor in the cost of the property, believing that this will be the cost of buying a house. However, there are many other costs to include when calculating the true cost of buying a property.

When you arrange your mortgage, you should expect to pay a mortgage arrangement fee. Some lenders may refund this and others won’t, and you may lose the fee if the sale falls through. The amount for this could be as much as £1,000. The lender will also carry out a valuation to make sure that the property value offers security for the loan. You will be charged a fee for this, which is often around £300.

Conveyancing is also a necessary expense, with fees of up to £800 being typical, although this may vary according to the value of the property. If the house costs more than £125,000, you will also have to pay stamp duty land tax.

To make sure that the property you are buying doesn’t have any major faults which will be expensive to put right, you should have a comprehensive survey. Although you can get a cheaper survey, you may not discover any problems which may lead to a huge repair bill. Expect to pay around £700 for a thorough survey. If the purchase falls through, you have lost your money so budget for two or three.

There are many more expenses associated with buying a home, so ask a CeMAP qualified mortgage adviser before committing to a property.