What are the costs of buying a house?

Buying a house is expensive.

In fact, if you’re taking out a mortgage that will take you thirty years to pay back, the actual purchase price might seem like a softer blow than the long list of fees, taxes and duties which are usually required upfront.

But what is the actual cost of buying a home? Let's look at common expenses you can expect to pay when you buy a property in the UK.

• Conveyancing fees

As the buyer, you want to make sure there isn’t anything that will get in the way of your legal ownership of the home. The conveyancing process is a thorough legal check against the property conducted by a conveyancer or solicitor. Checks include Land Registry, access rights and environmental searches and cost anywhere from £150 - £1,500. Conveyancing fees aren’t refundable if the property purchase falls through (for example, if the seller pulls out).

You should instruct a conveyancer as soon as your offer is accepted on a property, meaning their fees are due once you have a verbal agreement.

• Survey fees

The home survey is a vital part of the home-buying process. The process involves a qualified surveyor attending the property to assess its condition. How detailed the survey is depends on the age, condition and features of the property you’re buying, and you won’t be surprised to hear that the more detailed the survey, the more it will cost.

The house survey should be booked around the same time as the conveyancing, and fees must be paid upfront.

Surveyor’s fees range from £300 - £1,500 and are non-refundable if the sale doesn’t go ahead.

• Valuation fees

Your mortgage lender will also instruct a surveyor to inspect the property to determine if it's worth what they're lending you. In many cases, the mortgage lender valuation is based on online data, although site visits happen. You don’t arrange this – the mortgage lender does – but there can be a fee for the buyer to pay. Some banks offer mortgage deals where the valuation fee is waived.

Valuation fees can be up to £1,000.

• Mortgage lender fees

If, like most people, you need to borrow a whacking sum from a lender in order to own a property, expect that they’ll want to take a fee for arranging this.

Nobody likes paying mortgage lender fees, but they're a necessary evil of home-buying. Mortgage lender fees can be made up of various different charges, including booking fees, arrangement fees and mortgage account fees.

These can add up to as much as £2,000 and are non-refundable should the deal fall through.

• Electronic transfer fees

When your mortgage lender transfers the sum for your new property to your solicitor, there is yet another cost for you, the buyer, to bear. This is often referred to as the CHAPS (Clearing House Automated Payment System) fee.

CHAPS fees are usually around £50. It won’t break the bank, but like most upfront costs associated with home-buying, it's non-refundable.

• Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) is due on a residential property purchase over £250,000. If you’re a first-time buyer, you have a zero-SDLT threshold of £425,000.

For properties up to this amount, you don’t need to pay SDLT, but for anything over this threshold up to £925,000, a 5% rate applies. If you’re buying a property worth over £925,000 and up to £1.5 million, the rate is 10%. For any property costing above £1.5 million, SDLT is due at 15%.

It’s important to note that if you own any other properties, a further 3% SDLT is due on the above rates.

If you’re buying a £300,000 property as a non-first time buyer, the SDLT due would be £2,500.

• Buildings insurance

If you're signing decades of your life away to pay for a building, you'd better make sure you protect that building. Buildings insurance is something that all homeowners need in place from the moment they become the legal owner of the property.

This cover will insure the structure of the property – including ceilings, floors, walls and roofs – as well as permanent fixtures such as fitted kitchens and bathrooms against things like floods, fires, vandalism and structural movement. Garages and sheds are usually covered too.

Buildings insurance is normally between £100 - £200 per year.

• Mortgage payment protection insurance

Not everyone will choose to take out this type of cover, but if something happens beyond your control which means you’re temporarily unable to meet your mortgage payments, you’ll be glad you did. Mortgage payment protection insurance can cover the cost of your monthly mortgage payment if you become sick long-term, or lose your job through no fault of your own.

Mortgage payment protection insurance costs between £10 - £40 monthly.

• Removal company

It’s not technically part of the house purchase, but most people look at booking a removal company once they’ve had their offer accepted. Depending on how far you’re going – and how much stuff you’ve got – this could set you back anywhere up to £600. Usually, you won’t pay the full amount upfront, but a deposit is usually required.

How much does it cost to move house?

If we calculate the costs we’ve mentioned, assuming the upper limit in each case, the additional cost of buying a £300,000 property can be as much as £9,350. Most will be required upfront before you even get the keys.

We haven’t even listed things like accommodation for you and your family and storage for your stuff should you need to be out of your current place before completion. Furnishings, decorating, and any minor repairs will add an extra thousand or two.

It’s always a risk to put up so much money for a house sale that might fall through. This is where Home Buyers Protection Insurance comes in, allowing you to claim back most or all of the upfront costs associated with home-buying, including conveyancing fees, mortgage arrangement fees, survey fees and more.