The Costs Involved When Buying Or Selling Your Home

Do you want to know how much buying a house costs? Or confused on the fees when selling a home? You are not alone, there are so many figures involved it’s very easy to get caught out, so we have created a guide to break it down for you.

  1. Major upfront costs
  2. Mortgage cost 
  3. Costs of moving home
  4. Ongoing costs
  5. Freehold or leasehold
Major upfront costs include: Deposit, Valuation fee, Surveyor’s fee, Estate agent’s fee, Legal fees, Electronic transfer fee, Stamp duty and Removal costs.

Deposit: The amount you put towards the cost of the property when buying a home. This can vary depending on your age and if you’re currently on the property ladder or not. On average you need at least 5%-20% of the purchase price. For example £15,000 to £60,000 when buying a £300,000 home)

Valuation fee: A valuation fee can vary depending on the lenders, type of mortgage product you select and the property’s value. The cost can be anywhere from £150 to £1,500. Always shop around for the best mortgage deals and advice. Mortgages are unique to the buyer so it’s best to know how much you need before setting your heart on a property out of your price range.

Surveyor’s fee: It is so important before you buy a property to get it checked by a surveyor. They’re the professionals and can highlight any problems before you buy and potentially save you money on repairs in the long run. They range from £250 for a basic home condition survey to £600 or more for a full structural survey. This is a vital step so you understand if there are any problems before you commit to buying a house, it can save you a lot of stress and money.

Estate agent’s fee: The Estate agent’s fee is negotiated when they put the property on the market. This is only paid by the seller, not the buyer, to cover the estate agent’s services. On average it is 1%-3% of the sale price + 20% VAT. It is vital to always know the price of the service you are paying for, double check with your Estate Agent to make sure it is clear how much you will be charged for selling your home.

Legal fees: Legal fees are normally £850-£1,500 including 20% VAT. You’ll need a solicitor or licensed conveyor to carry out the legal work when buying and/or selling your home. Their role is to support you to ensure everything is completed the correct way. They will also do local searches (which will cost an extra £250-£300) to check whether there are any local problems or plans.

Electronic transfer fee: This costs £40-£50 and covers the lenders cost of transferring the money for the mortgage from the lender to solicitor.

 Stamp duty: Until 31st March 2021 you do not have to pay Stamp Duty on properties costing up to £500,000, check out our ‘The Stamp Duty Holiday Explained’ for more details of how this could affect you. Stamp Duty varies depending on if you’re a first time buyer, buying a second home or buying a property costing more than £500,000.

Removal costs: Depending on if you can transport all your valuables yourself, removal costs range from £300-£600. Always shop around and sort out the best deal for you.

Mortgage costs: A mortgage varies for each individual and their current situations, there are hundreds of types of mortgage products and several types of mortgage for different circumstances. Always look around, never settle for the first price you are offered. Remember to take the fees and charges into account and always look beyond the interest rate. A mortgage is a long term commitment so do not rush into making any decisions.

Mortgage fees:
  • Booking fee: £99-£250
  • Arrangement fee £2,000
  • Mortgage valuation fee £150 or more 
Top tip: Be prepared if you can, pay these fees upfront rather than adding them to your mortgage as you’d be paying interest on them for the period of the mortgage.

Costs of moving home:
  • House removal insurance: £300-£600

  • Storage costs: Prices vary depending on how much storage you need and how long for. Always shop around and compare prices and security arrangements.

  • Cleaning costs: You should always leave the property how you’d like to find it, especially if you are moving from a rental property. You could end up breaking your tenancy agreement and your landlord might charge you for the price of a professional cleaner.

  • Mail redirection costs: ‘You can redirect your mail to any UK or overseas address for 3, 6 or 12 months from just £33.99.’

  • Extra moving costs: Don’t forget to take into consideration extra budget for kennels for pets or childcare. Also don’t forget, moving can take longer than expected and it might take a day or two to get your cooker working or fridge fitted so budget for a take away or two. 
Freehold or leasehold: 

Freehold: The freeholder of a property owns it outright, including the land it’s built on. If you buy a freehold, you’re responsible for the maintenance of the property and land, don’t forget to budget for these costs.

Leasehold: A leasehold is when you own the property for the length of your lease agreement with the free holder. When the lease ends, ownership returns to the freeholder, unless you can extend the lease. Some houses are sold as leasehold property, in which case you own the property but not the land it sits on. Most maisonette and flats are owned leasehold, so while you own your property within the building, you have no stake in the building it’s in.  Top tips: Before making an offer, always enquire about: How many years are left on the lease?; How much is service charges and related costs?; What sort of lease is it? (this could affect getting a mortgage and the property resale value).

Ongoing costs: 

Insurance: It is a requirement to take out building insurance to protect your new home against damage from floods, fire, subsidence and more. Top tip: It’s also important to look into life insurance to pay off your mortgage should you die before you’ve repaid your loan and content insurance for all your possessions.

Council Tax: This varies depending on where the property is based. Ask the sellers or your Estate Agent if you are unsure how much a properties council tax bill is.

Running costs: Ask your Estate Agent or Sellers how much the current bills are on the property. Top tip: Don’t forget to budget for internet, TV packages and other monthly bills.

Leaseholders costs: If you buy a leasehold property, you’ll have to pay services charges and ground rent (around £50-£100 a year).

It’s natural to feel overwhelmed and confused with  fees when selling and/or buying a house. Hopefully this guide has helped  break it down for you. Remember to always ask questions from start to finish and if you feel unsure about anything, ask your advisers.

If you have any questions about selling your property, call one of our experts today and find out more about how we can help sell your home, stress free. Contact your local Estate Agent office here.