When it comes to buying a house, it’s easy to think of spiralling costs and fees that seem to pop up out of nowhere. If you’re looking at getting your first mortgage on a new home, then the cost of buying a house can appear even more daunting. To help you get to grips with the fees you can expect to come across, we’ve put together a guide of the costs involved in buying a house in 2024, including:
The cost of buying a house in 2024
6 min read
There's a lot to consider in the cost of buying a house. From conveyancing to stamp duty, make sure you know what to expect if you're buying a house this year.
- Amy Colton
Published January 23rd 2024
You have your monthly repayments to factor in when using a mortgage to buy a house, however there are also fees to pay when you apply and get your mortgage
You may be able to add these additional fees onto your mortgage and spread them over the course of your mortgage term, which could help with upfront costs. If you decide to go down this route though, it’s important to know that you’ll be paying interest on the fees. Below are the main mortgage fees you can expect to pay.
Booking fee – around £100-£300
Arrangement fee – up to £2,500
Valuation fee – around £200 – £1,500 (depending on property type)
Getting your mortgage in place is one of the biggest parts of buying a new house. If you’d like some guidance on how the whole procedure works, then check out our mortgage guide which explains the mortgage process in full.
There’s little escaping the deposit, and getting this together is usually the toughest part of getting yourself on the property ladder. Generally, the bigger deposit you’re able to put in, the easier it is to get a mortgage. The standard amount you need is between 5% and 20%, so this is the equivalent of £15,000 to £60,000 if you were to buy a £300,000 home. The bigger deposit you put down, the better rates you can access on your mortgage.
Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is a government-imposed tax on property purchases over a certain threshold. SDLT can add a big lump sum onto your costs, so make sure you’re aware of what you’ll be paying so you can factor it in. There are some exclusions, such as an increased threshold for first time buyers. You can learn more about stamp duty and the thresholds.
Carrying out a survey on the house you’re buying is crucial. When you have one completed by the Royal Institute of Chartered Surveyors (RICS), you can be confident that your new home’s going to be looked at by a reliable expert. If there are any problems with the condition of the property, identifying them before you complete your purchase could save you huge amounts of money further down the line. There are various survey’s you can get, depending on how much detail you need them to look in to. Find out more about the different surveys below or read our guide to surveys.
Your mortgage provider will carry out a limited survey to ensure the property you’re buying is valued correctly, and this is mandatory. The cost of the survey often depends on the price of the house you’re buying. For a property valued at £200,000 and in good condition, you can expect to pay at least £200 for this, however some mortgage providers include this as an incentive when you choose them to be your lender.
RICS Level 1 Survey: Home Condition Report
If you’re buying a relatively new home that’s been conventionally built, the basic level of survey could be okay for you. Any potential risks and urgent defects will be highlighted, and you can expect the cost for this report to start from £300.
RICS Level 2 Survey: Home Buyers Report
This survey’s more comprehensive than a basic valuation, and suitable for conventional properties that are in a reasonable condition. With this report, you can choose to add a valuation, helping you to save on having two separate surveys done. The typical cost of this survey is around £400 and up.
RICS Level 3 Survey: Building Survey
The most detailed survey you can get is the best option if you’re buying a larger or older property, or one that’s unconventional in some way. If the property has a thatched roof, for example, or you’re looking at carrying out extensive renovations, this should be the survey for you, and usually costs £600 and up.
Your solicitor will complete all of the legal work for you and will also act for your mortgage lender during the home buying process. Typically, you can expect to pay in the region of £850 to £1,500 for this. They’ll also carry out any property specific searches which are required to check on any plans or problems that might affect you.
Electronic transfer fee
This covers the cost of transferring funds from your lender to your conveyancer, and you’ll usually pay around £40-50, although some conveyancers may have this fee included as standard.
As well as the main costs involved in buying a house, it’s worth checking with your conveyancer to see what other fees you may have to pay. They should have a fees guide which details the things you’ll have to pay an extra charge for. From transferring freehold and leasehold titles to arranging the payment of government help to buy incentives, you can see any additional costs that might crop up.
When the big day comes and you can finally pick up your new keys, you might need the help of a removal team. This typically costs from £500-£2,000, but you could rent a van for a day or two and reduce this substantially. Get a house removals quote so you can weigh up what you require from them to suit your needs and your budget.
Ongoing costs once you’re in your home
It’s a good idea to have a decent understanding of what the ongoing costs will be as a homeowner. Once you’ve completed your purchase, you’re fully responsible for all of the costs involved in running the property.
Maintenance and repairs
It’s very common for new homeowners to carry out repairs, and in fact the average spend is almost £6,000. This is one of the reasons why it’s really important to get a good survey done.
Building, contents and life insurance
If you’ve rented a property in the past, then you’re likely to be familiar with contents insurance. But when it comes to owning your own home, you’ll need to too, as soon as you’ve exchanged contracts. It’s also a good idea to take out a life insurance policy that pays off your mortgage in the event of your death before it’s been fully repaid. Make sure you discuss this with your financial or mortgage advisor before taking action.
Of course, you will take over council tax payments, and you can check which band your new property’s in before you complete. Remember that if you’re a single occupier, you should receive a discount.
You’ll also be responsible for all your new home’s running costs. When it comes to energy bills, you should receive your property’s energy performance certificate (EPC) from the seller. This will give you potentially useful information on how well the property performs at present, as well as the level of efficiency you can expect if you address any issues that may be restricting performance. As well as energy bills, you’ll need to factor in things such as your phone, TV and internet packages.
If you’re buying a leasehold property, you’ll owe ground rent and service charges to the owner of the freehold. Ground rent will be defined within the lease and could be anywhere from nothing to over £1,000, while service charges vary depending on the property. Make sure you find out what they are before moving in, to avoid any nasty shocks.
Top tips to keep the cost down
There’s no getting away from the fact that buying a house is an expensive thing to do. This is hardly a surprise as there’s a good chance that it’ll be the biggest financial commitment you ever make. As you’ll want to make savings where possible, here are our top tips for keeping the cost of buying a house down.
1. See if you qualify for any government schemes
If you’re early on in the house buying process, check if you can benefit from any government schemes. Incentives such as the Lifetime ISA, or 5% deposit, are a great way to make your money go even further when you’re saving up for your first home.
2. Do your research
When it comes to house prices, there are lots of online resources that can help you figure out if you’re paying a fair price for your property. Use them to match up sold prices with what the properties were actually like and you may be able to negotiate on the cost of your new home if it’s not had any recent renovations, for example.
3. Look after your credit score
Do everything you can to boost your credit score, and make sure you check it with an agency prior to applying for a mortgage.
4. Get a mortgage pre-approval
If you get a mortgage in principle from a lender, you’ll be in the best position possible to proceed quickly once your offer is accepted. Plus, you’ll have more strength when it comes to negotiating the price of your new home.
5. Ask the seller to take the property off the market
When you submit your offer, make it a condition that the property’s taken off the market. This makes it less likely that you’ll be gazumped before you exchange, where you can lose out on any money that you’ve already spent.
6. Don’t get too far ahead of yourself
This applies to a wide range of things. Make sure you don’t book things in too early, as you can lose out if there are hiccups. For example, don’t organise for a survey on a property until you’ve been approved for finance by your mortgage lender. Wait until you’ve exchanged contracts and have a completion date before booking a removal service or pet and child care. Don’t change things like your driving licence before completing, and if you’re moving out of a rented property then try to time your notice period as well as you can to avoid losing out.
7. Ask the seller lots of questions
Don’t be afraid to grill the seller about everything and anything you can think of. From asking how many viewings there’s been to help you decide what offer to make, to checking how long the property’s been on the market and what’s included in the price in terms of fixtures and fittings, there are lots of ways to make some savings. Find out things like what renovations have been done, when the house was last rewired and how old the boiler is.
What is conveyancing?
November 22nd 2023-5 min read
Conveyancing is the branch of law specifically relating to the legal side of moving home. When you buy or sell a house, you will need a conveyancer or solicitor so that legal ownership is transferred from one person to another.
Home buyers surveys
January 23rd 2024-6 min read
If you’re wondering how home surveys work, how much they cost and how long they take, we’ve got you covered in our handy guide.
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