Whether you’re buying your first home, haven’t moved for 3 or 30 years, or are purchasing an investment property, it’s not just the purchase price that you’ll have to pay.
The list below gives an overview of the additional costs that you may incur:
- Legal fees – usually a fixed fee, this is your conveyancer’s charge for assisting you with the purchase.
- Disbursements – in addition to legal fees your conveyancer will charge for disbursements including:
- searches (these usually include local authority, drainage, environmental and chancel liability searches)
- Land Registry fees (to carry out searches and register your purchase and any mortgage)
- online ID checks (for regulatory compliance purposes)
- bank transfers (to send the purchase monies to the seller’s conveyancer on the moving day).
- Insurance – buildings, contents, life, and possibly indemnity insurance (where your conveyancer identifies an issue with the property that cannot be resolved quickly, easily or cheaply rectified another way). If you are purchasing a leasehold rather than a freehold property, the landlord/management is likely to recover building
sinsurance costs from you as part of the service charge.
- Stamp Duty Land Tax (SDLT) – an increasingly complex area, your conveyancer will be able to advise whether SDLT is payable at the standard or additional rate, or whether you benefit from First Time Buyer Relief and pay a minimal amount or none at all.
- Mortgage costs – there will be a fee to make the application, as well as the monthly repayments and bank transfer charges. The mortgage offer will also list further charges for early repayment (if you want to pay off the mortgage during the fixed rate period) and redemption (when the mortgage is paid off and the account is closed).
- Survey – it is always recommended to instruct a surveyor to inspect the property. If you are purchasing with a mortgage the lender will generally carry out a basic valuation, but you can ask them to upgrade this to a survey, which will benefit you rather than just the lender, and may reveal some issues with the property that your conveyancer, or an appropriate expert, should be asked to investigate further.
- Specialist reports – your survey may recommend that you instruct a specialist contractor to look more closely at something, such as the electrics, heating, potential asbestos, damp, or other structural issues. There will be additional costs associated with this.
- Works – you may already have plans to redecorate or extend the property, but your survey or a visit may reveal other things that need attention, and money, spent on them. The seller may be willing to pay to rectify some issues, but if not then you will need to budget for potential maintenance and repair costs.
- Leasehold costs – these are additional costs applicable mainly to leasehold properties, although some charges may also apply to freehold properties on newer developments:
- ground rent
- service charge
- buildings insurance contribution
- notice fees (to inform the landlord/management company that you are the new owner so they can contact you to arrange payments and notify you of any consultations for works)
- compliance certificate fees (to confirm compliance with a Land Registry restriction to the registration can be completed)
- any charges associated with you becoming a member of the management company
- Utilities – as well as the purchase price and other possible costs mentioned above, you will also need to consider utility payments e.g. council tax, water, sewage (whether the property is connected to mains drainage or a private system), electricity, heating (gas/oil/wood etc.), telephone, internet, television.
- Additional items – the seller may offer certain items to you for an additional price, such as furniture, fuel (oil/wood/coal) or kitchen appliances. It may also be necessary to pay to transfer guarantees for items into your name following the purchase, and apply for a parking permit depending on the property’s situation.
- Removals – if you’re purchasing the property to live in, it’s likely you’ll need to move furniture and personal possessions from your current residence to your new home, so you’ll have to factor in the cost of doing this. You might hire a van, so remember fuel costs, or pay a professional removals company. If the move is going to take time, you may also incur storage costs.
- Investment costs – if you are purchasing the property to rent out, whether permanently or for holiday letting, you will also need to consider:
- agent fees
- maintenance costs
- costs associated with complying with any legal requirements, such as annual gas safety checks
In addition to the financial cost of your purchase, there will also be a cost to you in the time spent searching for the right property and then dealing with the paperwork to take you from expressing an interest to collecting the keys and beyond.
At Girlings we appreciate this is both an exciting and nerve-wracking time for you, and are committed to supporting you every step of the way, so please contact the Residential Property team if you have any questions or concerns.