The fees to watch out for when buying a house

From stamp duty to solicitors’ fees, here’s what you might need to save for…

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The extra costs of buying a home

When you’re saving for a house, the focus is often on reaching your target deposit. But there’s a few extra costs to think about as you move through the home-buying process.

That’s why it’s vital to build a buffer into the funds you save - to make sure you’re not caught short after paying your deposit.

Below are just some of the extra costs you might incur when buying a home.

Head to our saving for a house section to see how Wesleyan can help you save for them.

Stamp duty

Also known as Stamp Duty Land Tax, stamp duty is a tax on property purchases. It can add a hefty chunk to the cost of buying a home.

For residential properties, you’ll pay stamp duty on homes over the value of £125,000 (unless you’re a first-time buyer). For non-residential land and properties, the threshold is £150,000.

The amount of stamp duty tax you pay will depend on the purchase price of your property, as per the table below:

Property value
Stamp duty rate
Up to £125,000
Zero
The next £125,000 (the portion from £125,001 to £250,000)
2%
The next £675,000 (the portion from £250,001 to £925,000)
5%
The next £575,000 (the portion from £925,001 to £1.5 million)
10%
The remaining amount (the portion above £1.5 million)
12%

First-time buyers

Current laws mean most first-time buyers don’t pay stamp duty right now. If you’re a first-time buyer in England or Northern Ireland, you won’t pay stamp duty on primary residential properties worth up to £300,000.

These rules are subject to change though.

Both Scotland and Wales have their own versions of Stamp Duty Land Tax known as Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT).

If you're wondering how much tax you may need to pay on your home, use our simple Stamp Duty Land Tax calculatorLand and Buildings Transaction Tax calculator or Land Transaction Tax calculator to plan your next move.

Mortgage product fee 

On some mortgages, you get the option to pay an up-front product fee in return for access to a better rate. Typically, this fee is in the region of £1,000. 

Depending on how much you’re borrowing and the length of your term, the product fee may or may not be worth paying. Do your maths to make sure you’re getting value for money. 

Valuation fee

As they are lending against the value of the house, the mortgage lender needs to verify the property’s worth before proceeding. 

They’ll usually send a surveyor round to value the house, and you’ll often have to cover their costs in doing so. Basic valuations can sometimes be bundled into other mortgage costs, but in other cases they can cost £400 to £600.

Buildings survey 

To do your due diligence on a property, it’s wise to take out a house survey. 

This can range from a basic survey to a full structural survey, so costs can vary quite dramatically. But it could be money well spent if it stops you buying a house riddled with defects. 

You’re looking at around £1,000 to £1,500 depending on the value, age and size of the house.

Solicitors’ fees 

Also known as conveyancing fees, solicitors’ fees will typically set you back at least £1,000. This is for taking care of the legal searches and paperwork associated with your property purchase.  

Sometimes searches are billed in addition to the solicitor’s costs. When the time comes, make sure you ask whether the price includes the searches.

Buildings insurance

Your lender will need to see buildings insurance in place to protect their asset. But you don’t need to take out your buildings insurance from the same provider.

While it’s not mandatory, contents insurance is usually a good idea too. This protects all your possessions against loss, theft or damage.

In both cases, the costs will vary depending on the level of cover you need, and the value of your property. You can find out more about home insurance here.

Mortgage protection

Mortgage protection insurance is designed to pay off any outstanding mortgage on your home if you die. 

It’s not compulsory, but if you’re buying your home as a couple, it’s worth thinking about how your partner would pay the mortgage if you were no longer around.

Costs for mortgage protection will vary, but you’ll usually be able to pay your premiums monthly or yearly. 

Find out more about mortgage protection.

The cost of moving

Finally, make sure you factor in the cost of the move itself. Removal services are rarely cheap – and you’ll be amazed at just how many boxes you need.

According to reallymoving.com, the average moving cost of a 1 to 2 bedroom house is between £300 and £433. For a 3-bedroom house, it’s £595.

Get some quotes well in advance of your moving date. Booking early may save you money – or at least give you time to set the funds aside.

You might be interested in…

Guide to saving for a house

Need some help on how to save for a house? In this brief guide, we’ll get you started on the road to being a homeowner.

Schemes to help you save for a house

If saving for a house deposit seems like an impossible task, there are ways you can get a helping hand.

Mortgage calculators

Are you looking for an idea of how much you can afford to borrow, or how much Stamp Duty you may need to pay? Our calculators can help.