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Find your new home
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Whathouse? The Cost of Buying a Home

2nd December 2021
Redrow - Inspiration - Whathouse The Cost of Buying a Home

The final instalment of our New Home Buyers guide with Daniel Hill, helps to calculate the costs of buying a new home, so there’s no hidden surprises when it comes to moving.

Unfortunately, the cost of buying a home is more than just its purchase price – there are a number of other bills and fees that you’ll also be responsible for paying.

The mortgage

This includes:

  • The product fee for your choice of loan (some are free, rising to over £2,000 depending on the type of mortgage deal).
  • A booking/reservation fee (around £100 or so).
  • A valuation fee for the lender’s surveyor (typically around £250 and not to be confused with your own survey fees).
  • Your broker’s fee (which might be zero if they are paid through commission from the lender).
  • One-off administration fee for setting up your mortgage account.
  • Telegraphic transfer/CHAPS fee for your payment on completion (around £40 to £50).

Legal fees

You will have to pay your solicitor for all of the legal work, which includes:

  • Conveyancing fees (most likely starting at around £1,000+VAT).
  • Local authority land/property searches for around £250.
  • Land Registry fees (a convoluted government system, but around £250 for the average property price).
  • Disbursements for other required documents.

Surveyor

Even with a brand new home, it is recommended (though not essential) to pay a chartered surveyor to inspect the property to find any potential problems, such as structural problems, damp and flood risks. If any problems are found, you can decide whether or not to purchase at all, to get things fixed or negotiate on price.

Stamp duty

Stamp duty (also referred to as stamp duty land tax, or SDLT) is a tax paid to the government for land and property transactions. After the end of the government’s temporary stamp duty ‘holiday’ from 1 October 2021, rules have reverted to previous levels, which are broken down in layers relating to the property price.

Standard rates for buyers of the only property they will own are as follows:

Property price Stamp duty rate

  • Up to £125,000- 0%
  • Portion between £125,001 and £250,000 - 2%
  • Portion between £250,001 and £925,000 - 5%
  • Portion between £925,001 and £1.5million- 10%
  • Remaining amount over £1.5million - 12%

As an example, for a property purchased at £350,000:

  • 0% payable on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the final £100,000 = £5,000
  • Total SDLT payable = £7,500

Rates are different for first-time buyers purchasing a home priced up to £500,000. There is no Stamp Duty Land Tax payable on the first £300,000 and a rate of 5% on the balance.

So for the example above for a first-time buyer:

  • 0% payable on the first £300,000 = £0
  • 5% on the final £50,000 = £2,500
  • Total SDLT payable = £2,500

To download the full guide click here. This will take you through the whole process, step-by-step; from house-hunting to past moving-in day. 

Read more of our home buyers guide for some helpful advice to learn more, Ultimate First Time Home Buyers Guide, How To Improve Credit Score and Faq's and Questions To Ask When Viewing A House.