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You have found the home of your dreams, and you know how much it costs right? Really? Are you sure?
Whilst you know there are ‘fees’ – nothing is for free after all – do you know how much your dream home will really cost you?
New research by TotallyMoney shows the true costs involved in buying a property, with the average price people have to pay upfront is £38,777. And that is on top of the price of the house itself.
Whilst buying your home can be an exciting time, getting on the property ladder brings with it some added financial stress if you are not prepared. Not considering some of the less obvious costs now, could see your budget take a major hit later.
According to TotallyMoney, seemingly minor outlays like house surveys, packing materials or fixing the odd crack, could add up to nearly £1,500 and other fees could represent 40% of the upfront costs.
So what costs could empty your wallet if you are not ready for them?
With so many legal elements to consider when buying a house, it is definitely best to leave it to the experts. A straight forward exchange could cost you up to £1500 but you may want to tuck a bit more away just in case. Many property purchases run smoothly but sometimes issues arrive so, as with most things in life, a contingency stash of cash would be a sensible thing to have.
Those dreaded two words you hear regularly when it comes to buying a house. If the property is worth less than £125,000, you can breathe a sign of relief. You will not have to pay stamp duty.
However, properties worth over these amounts will be expected to pay Stamp Duty, which is all worked out based on the final price and could run into the tens of thousands. If you are buying a second property, remember there could be an extra 3% on top of the normal rates on top.
First time buyers also receive a discount, but your solicitor will be able to advise and help with the paperwork. Just make sure you are prepared to pay!
A legal requirement, a conveyancing solicitor will be able to flag any local issues you need to be aware of, and registering change of ownership with the Land Registry. The cost of this varies and is often based on the value of the home you are buying, whether it is freehold or leasehold, and more. Costs can range from £500 to £1500 depending on who you use so do your research.
You might not want a full building survey, but some advise a homebuyer’s report could be a good idea. It can identify a lot of potential issues with your dream home which could help you work out how much this could cost you in the long run. However, it will set you back over £750 on average now.
These can range from a few hundred to a thousand pounds. Some will add it to your mortgage, whilst others will enable you to pay these costs up front. The choice will be yours but we aware that they will be added on at some point.
Depending on your mortgage provider, you may be required to take out building insurance. You will need it in case the property needs repair, and even if you are buying an investment property, it is up to you as a landlord to have it, not the tenant.
Prices vary, but can set you back around £80 per month.
Packing boxes and tape, removal company, storage costs if there is gap between moving out of one property and into the next one… it all adds up. Setting up a moving budget now will also give you peace of mind if anything goes wrong with the move.
And don’t forget to add on removal insurance if you have special furniture or equipment that could get damaged in the move.
This could depend on what is an urgent job or not but fixing leaks or rewiring the electrics could be a matter of safety. Little jobs like this may need to be done as soon as you move in, but it is amazing how these add up. Rewiring electrics could cost as much as £2,750 which could be a serious blow to your finances.
An essential to everyday life, we can’t survive without broadband! You will want to get all of this sorted as soon as possible so you can start living in your new dream home. Be aware of the fees that might be involved in setting these up or transferring them from one property to the other.
Being budget aware when it comes to buying your new home can save you stress in the long term. Listed as one of the most stressful things you will do in your lifetime, a little bit of knowledge and being prepared can help lower the stress and (dare we say it…) enjoy the process!
If you have any questions relating to the costs involved in buying your next property, contact one of the Aston Anderson team today.