Hidden costs when buying a house

A home is the most expensive purchase of our lifetime (unless you’re a billionaire like Richard Branson, James Ratcliffe or the Barclay Brothers). Many will pour in every single cent of their savings to close a fast home sale. However, this is not a good idea as there are several other costs that prospective buyers should prepare for, namely:

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• Stamp Duty


The only way to obtain a Certificate of Land Ownership, and thus, legally purchase a property, is by paying a stamp duty to the government. The stamp duty is a technically a tax levied on the documents provided by the government.


All purchases above £125,000 are required to pay a stamp duty, with the exception of first time buyers, who are only required to pay if their purchase amount exceeds £300,000. The rate of taxation starts at 2% and is capped at 15%. Please consult HRMC for the rate personally applicable to your purchase.


• Surveyor’s Fee


Certain banks require mortgage applications to be accompanied by a professional property valuation prepared by a registered surveyor. The fee is roughly around £250, although it can go higher for unique or hard to reach properties. If it is an old building, banks may require a more detailed survey involving the structural integrity of the property. This will cost significantly more.


• Solicitor’s Fee


Conveyancing is the legal process of property transfer between two entities. They are performed by a solicitor. The fee varies, but conveyancing fee for individuals typically ranges between £450 and £850.


• Repairs, renovation and furnishing


Most houses, even new ones, will require a small amount of repairs. Buyers should ideally ask sellers to perform the repairs in advance, but they should be prepared to undertake follow up repairs if required. Renovation, especially in the kitchen, is usually required for brand new homes.


Some buyers assume that they can just transfer their old furniture into the new house. While it is good to be sensible with spending, sometimes the issue of size, fit, and colours do crop up.


• Moving cost


People frequently underestimate the cost involved in moving. Ideally, before moving, buyers should spend time to itemise all related expenditures such as boxes, bubble wraps and tapes. They should also shop around for the cheapest (but reputable) moving company.


• Indirect cost


Many buyers will miss workdays during the purchase. From house viewings and making copies of documents to signing contracts, the indirect cost should not be discounted, especially for the self-employed.


Relying on your credit card for these costs is not a good idea. Aside from the interest, please remember that you are now servicing a new loan!