How Much Does it Cost to Buy a House?

Buying a house is a significant financial commitment, and a property valuation can depend on a variety of factors. These include the location, size and condition of the house, and the current state of the housing market. But beyond the asking price of the property, there are a number of other costs that need to be factored in to gain a true estimate of how much it costs of buying property. These include legal fees, mortgage fees, ongoing expenses and more.

To help you factor in all expenses and have a more accurate understanding about the overall cost of homeownership, we cover all the costs to consider, including legal charges for buying a house, mortgage costs, ongoing expenses, and more.

What is the average cost of buying a house UK?

The average cost of buying a house in the UK depends on the location and condition of the property, as well as the current state of the housing market. However, as of 2022, the average price of a house in the UK is around £296,000. It should be noted that this figure can be higher in certain areas, such as London, where the average house price is significantly higher than the national average at £542,311. Moreover, it’s important to note that this does not include additional costs such as stamp duty and legal fees when buying a home.

Average house prices are determined by the state of the housing market, which has been turbulent in recent years. During periods of economic recession, for example, housing prices may decrease as fewer people can afford to buy homes. When interest rates are high, it can also make it more difficult for potential buyers to secure a mortgage, which can lead to a decrease in demand for housing and a decrease in prices. The same is true vice versa, where the average cost of buying a house is likely to be more during periods of economic growth, despite lower interest rates.

How much are lawyer fees for buying a house?

Legal fees when buying a house in the UK can vary depending on the complexity of the transaction and the solicitor you choose. On average, legal fees for buying a house in the UK can range from around £850 to £1,500, although they can be higher for more complex transactions. Additionally, there may be other costs associated with the legal process, such as VAT, which is currently at 20% in the UK and disbursements such as search fees when buying a house, land registry fee and telegraphic transfer fee.

It’s important to note that these costs can vary depending on the location of the property and the specific services provided by the solicitor. It’s best to get a quote from a few different solicitors to compare costs and services before making a decision. It’s also worth noting that some mortgage providers may require you to use a solicitor from their lender panel, while others may give you the option to use your own solicitor. It’s a good idea to check with your mortgage provider to see what their policy is.

Can your solicitor fees for house buying be included in your mortgage?

Generally, the cost of legal fees are separate from your mortgage, so you’ll need to be able to pay legal fees as a one-off lump sum at the start of your journey to buying a house.

How much are mortgage fees?

When thinking about the costs of buying property, mortgage fees are an important factor to consider as they can add to the overall cost of the mortgage. These fees when buying a home can include a variety of charges such as:

Application fee: This is a fee charged by the mortgage lender to cover the cost of processing the mortgage application. The average application fee is around £200, but it can vary depending on the lender and the type of mortgage.
Valuation fee: This is a fee charged by the lender to cover the cost of valuing the property you wish to purchase. The cost of a valuation fee can vary depending on the size and location of the property, but on average it can be around £150-£800.
Arrangement fee: This is a fee charged by the lender to cover the cost of setting up the mortgage. It’s sometimes referred to as a product fee or completion fee. This fee can vary greatly depending on the lender and the type of mortgage but can be around £500-£2,000.
Early repayment charge: Some mortgages come with an early repayment charge, which is a fee charged if you want to repay the mortgage early or make overpayments.
Exit fees: Some mortgages charge an exit fee when the mortgage is closed, which can be charged when the mortgage is paid off or when you move to another lender.

Like solicitor fees for buying a house, it’s important to shop around and compare the fees and charges of different mortgages before making a decision. It’s also important to ask the lender to give you a breakdown of the fees and charges so you can compare them easily.

Furthermore, some of the fees for buying a house can be added to the mortgage amount and paid off over time, while other fees must be paid upfront. It’s important to be aware of all the costs involved in taking a mortgage, including the legal fees and the stamp duty, which are additional costs to the mortgage fees.

Stamp duty

Stamp duty is a tax that is paid on the purchase of a property in the UK. The amount of stamp duty that needs to be paid is based on the purchase price of the property and is calculated as a percentage of that price. It also depends whether you are a first-time buyer or not.

For properties purchased in England and Wales, the stamp duty rates as of 2023 are:

0% for properties with a purchase price of up to £425,000 for first-time buyers and properties with a purchase price of up to £250,000 for non-first-time buyers
5% for properties with a purchase price between £4250,001 and £625,000 for first-time buyers (on the portion exceeding £425,001) and properties with a purchase price between £250,001 and £925,000 for non-first-time buyers
10% for properties with a purchase price between £925,001 and £1,500,000 for non-first-time buyers
12% for properties with a purchase price of over £1,500,001 for non-first-time buyers

There are different rates for Scotland, so it’s worth checking how much you will pay if your property is based there.

Surveyancing fees

A surveyor is a professional who assesses the condition of a property and provides a report on any issues that may need to be addressed. The cost of a surveyor varies depending on the type of survey requested, the location of the property, and the size of the property.

The different types of surveys include:

Level 2 Survey (Homebuyer Survey)

This is the most common type of survey and is typically used by people buying a property. This report will identify any issues with the property, such as structural problems, damp, or other issues that may need to be addressed. The cost of a Homebuyer Report can range from £400 to £1,000.

Level 3 Survey (Building Survey)

This type of survey is more detailed than a Homebuyer Report and is typically used for older properties or properties that are in need of significant repairs. The surveyor will provide a detailed report on the condition of the property, including any issues with the structure, roof, and other parts of the building. The cost of a Building Survey can range from £630 to £1,500.

Despite being an additional cost, having a home survey can provide valuable information that can help you make a more informed decision when buying a property. It can also give you an understanding of what repairs or maintenance may be needed in the near future, and help you budget accordingly. Overall, a home survey can provide peace of mind and help you avoid any surprises after you have purchased the property.

Additional costs when buying a house

When buying a house, it’s important to consider not only the initial costs of the purchase, but also the ongoing expenses that come with homeownership. These ongoing expenses and additional costs of buying property can include:

Monthly mortgage payments: The cost of the mortgage will be the largest ongoing expense for most homeowners. Mortgage payments will typically include both the interest and the principal on the loan, and the amount paid will depend on the size of the loan, the interest rate, and the length of the mortgage term.
Property taxes: Property taxes are typically based on the value of the property and are used to fund local services such as schools and roads. The amount of property tax paid will depend on the location of the property and the local tax rate.
Homeowners insurance: Homeowners insurance is typically required by the mortgage lender and covers the cost of repairs or replacement of the property in case of damage or loss. The cost of homeowners’ insurance will depend on the location of the property, the size of the property, and the level of coverage.
Maintenance and repairs: Owning a property also means that you will be responsible for maintaining it, including repairs and replacements such as painting, roofing, and appliances. It’s important to budget for these costs and to have a savings account for unexpected repairs.
Utilities: As a homeowner, you will be responsible for paying for utilities such as electricity, gas, water, and internet/cable. The cost of these utilities will depend on usage and the provider.
Homeowners association fees: If the property is part of a homeowners association, there will be additional fees to pay for the maintenance and upkeep of common areas and services.

How much does it cost to move?

Some of the costs associated with moving house include hiring a removal company, paying for storage fees, and purchasing packing materials. The cost of hiring a removal company can range from a few hundred pounds for a local move to several thousand pounds for a long-distance move.

Additionally, the cost of storage, if needed, can also add up, depending on the period of time and the size of the items. Other costs can include disconnecting and reconnecting utilities, changing your address and hiring professional cleaners. It’s important to budget for these costs and to obtain quotes from different companies to compare prices. Overall, moving house can be an expensive process, but with proper planning and budgeting, it can be made more manageable.

Summary

Buying a house is an important decision, and a big financial commitment. That’s why it’s important to be aware of all the costs beyond the asking price of the house. From mortgage fees to solicitor fees, and stamp duty and ongoing expenses, these costs all contribute to the total cost of buying a house.

Additionally, it’s important to consider getting a home survey, which can provide valuable information about the condition of the property. It’s important to be aware of all the fees when buying a house UK, , and to budget accordingly to avoid any surprises later on.

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