When calculating your budget for buying a home, it’s important to consider the additional costs involved in the process, beyond the cost of the property itself.
The average upfront cost of completing a transaction is around £38,000, according to a study from TotallyMoney.
When you break it down, there are a number of fees and expenses involved in buying a property, and it’s vital to factor these into your budget to ensure you’re able to cover the initial cost and adapt your search accordingly.
For example, the main bulk of your budget will go into the deposit, which is usually between 5-20% of the total value of a property, but there are several other necessary expenses to include in your overall costs, such as:
- Surveys: Building surveys and home buyer’s reports cost an average of £786 and are essential to making sure that the property you’re looking at is structurally sound and isn’t hiding any nasty additional expenses.
- Repairs: Based on surveys and viewings, you may also discover certain aspects of the property that require fixing or repairing when you move in. Leaks, cracks, loose roof tiles, dodgy electrics, out of date fixtures, run-down boilers and other seemingly innocuous issues can all add up, potentially bumping up your budget by hundreds or even thousands of pounds. Sometimes these problems can be addressed before the sale, by reducing the asking price or requesting that the seller fixes the issues before you buy.
- Solicitor’s fees: It’s vitally important to hire a conveyancer/solicitor to handle the paperwork of your sale, including dealing with searches, title deeds, mortgage checks, and liaising with your seller’s solicitor. These fees generally run between £850-1,5000 but will help to ensure the transaction runs as smoothly and quickly as possible.
- Renovations and redecoration: No property is perfect, even if it’s a new build, and you may decide that you want to make changes to your prospective home once you move in, such as updating the kitchen or bathroom, knocking through a wall, replacing windows, sanding floors, or simply just repainting. All these plans will add to your budget, though you may find you end up delaying non-essential changes until you’re settled in and have the finances to do so.
- Fixtures, fittings and furniture: When you go to house viewings, make sure to bring a measuring tape and the dimensions of your existing furniture to make sure everything will fit nicely. Maybe your big, comfy corner sofa is too large for your new living room, or the master bedroom doesn’t have enough storage space, and you’ll have to shell out for a new wardrobe. Or perhaps you’ll need to invest in new white goods to fit out your kitchen, as the sellers are taking theirs with them. Don’t assume everything you see during viewings is included in the price of the property and factor in additional costs accordingly.
- Transport and parking: Does your new property have a driveway or garage, or will you have to fork out for a resident’s parking permit? How far is it to the nearest public transport links, and will the move affect the price of your commute or school run? These are all ongoing costs that should be considered when looking for a new home, and may even help you make a final decision on whether a property is The One for you…
- Mortgage payments: How much can you borrow? How much can you afford to put down on the deposit? How long can you fix your interest rate for? Your lender will need to know that you can comfortably cover your mortgage each month, alongside all the necessary insurance payments and bills.
Finally, make sure you’ve done your research and can afford to search in your chosen area. Often looking just a little further afield can reduce house prices by a significant amount. Your conveyancer can help you to negotiate all the different processes of purchasing a home, and make sure that you have all the appropriate paperwork in order so that your sale goes through with the minimum of stress. Get the best start in your search by making sure you’ve put together a sensible budget that incorporates all of the above additional costs and find the perfect home that suits your circumstances and your finances.
For more advice on property and conveyancing, speak to our friendly team of property solicitors at Frances Lindsay & Co. We have over 50 years’ experience in buying and selling property in the Thames Valley and beyond, and offer fixed fees for every step of the process. Visit us at www.franceslindsay.co.uk or call 01628 634667 to book an appointment and get a free online conveyancing quote!