The cost of buying a house and moving

Make sure you have saved enough to cover all the upfront costs.

These include:

You will pay Stamp Duty on properties costing more than £250,000 for residential properties, unless you’re a first-time buyer. Eligible first-time buyers will now pay no stamp duty on properties costing up to £425,000, and the value of the property on which first time buyers can claim relief will increase from £500,000 to £625,000.

Stamp Duty rates as announced in the mini-budget on 23 September 2022 will remain the same until 31 March 2025.

If you’re buying a second home, you’ll still pay an extra 3% Stamp Duty on properties costing more than £40,000 at the relevant rate at that time.

This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.

If you’re buying a property in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) and in Wales Land Transaction Tax (LTT) instead of Stamp Duty.

This is the amount you put towards the cost of the property when you buy your home.

Generally, the bigger the deposit you can pay, the more likely you are to be given a mortgage (subject to a mortgage affordability assessment), and the lower your interest rate is likely to be.

On average, you need at least 5% to 20% of the purchase price (for example: £10,000 to £40,000 when buying a £200,000 home).

The mortgage lender will assess the value of the property to establish how much they are prepared to lend you.

Valuation can cost between £150-£1,500 based on the property’s value.

Some lenders might not charge you for this, depending on the type of mortgage product you select.

The lender’s valuation is not like a full structural survey so it might not identify all the repairs or maintenance that might be needed.

Before you buy a property, get it checked by a surveyor.

This is vital so you understand if there are any problems before you buy.

Surveys range from a basic home condition survey costing around £250 to a full structural survey from £600 or more.

Paying for a good survey could save you money on repairs in the long run.

You’ll normally need a solicitor or licensed conveyancer to carry out all the legal work when buying and selling your home.

Legal fees are typically £850-£1,500 including VAT at 20%.

They will also do local searches, which will cost you £250-£300, to check whether there are any local plans or problems.

This usually costs £40-£50.

It covers the lender's cost of transferring the mortgage money from the lender to the solicitor.

This is only paid by the seller, not the buyer, for the estate agent’s services.

It is negotiated when they put the property on the market.

It is usually 1% to 3% of the sale price plus 20% VAT, or a flat fee for online estate agents.

Mortgages are about more than your monthly repayments and you need to factor in the other fees into your calculations.

These might include:

• a booking fee of £99-£250
• an arrangement fee of up to £2,000, and
• a mortgage valuation fee (£150 or more).

It’s best to pay these upfront rather than adding them to your mortgage, otherwise you’ll be paying interest on them for the life of the mortgage. But you should check whether booking and arrangement fees are refundable if the mortgage doesn’t go ahead.  If not, it may be possible to request these are added to the mortgage and then to pay them once the application has been approved and is definitely proceeding.

Remember once you buy your own home you’re responsible for looking after it.

The average repair bill for new homeowners is £5,750.

Your survey should have highlighted any problems that need fixing straight away.

The lender will require you to take out buildings insurance to protect your new home against damage from fire, floods, subsidence and anything else.

It’s also a good idea to have contents insurance for all your possessions, and life insurance to pay off your mortgage should you die before you’ve repaid the entire amount.

The amount you pay is based on where the property is and the valuation band the property is in (apart from in Northern Ireland where rates are set individually).

Ask the sellers how much they spend on utilities – gas, electricity and water – every year.

Don’t forget to think about charges for your phone, TV packages and broadband.

If you have an existing leasehold property, you might have to pay ground rent (around £50-£100 a year) and service charges to the person who owns the freehold. However, from 30 June 2022, ground rent charges were banned on new residential long leases in England and Wales. This includes existing leaseholders who voluntarily extend their leases.

Service charges and admin fees differ between properties.

This is an important cost of running a property so make sure you have all the information about these charges.

There are different ways you can own property: freehold, leasehold or through a share of the freehold.

Once you know the cost of your new mortgage payments, new insurance policies, solicitor and estate agent fees, make time to find out about moving-day costs.

Whether you’re a first-time buyer or a seasoned home mover, it’s important to know and prepare for these costs, which can be surprisingly high.

The average removal cost ranges from £300-£600, although you could rent a van do it yourself.

Remember to shop around for quotes (and references) to find a reliable firm.

Check the removal firm you hire is insured.

If you’re moving yourself, think about arranging insurance cover. Check if your existing home insurance policy will cover your move – many policies will if you’re using a professional removal firm.

Shop around to compare prices and security arrangements, and to get a sense of average costs. Estimate the length of time that you’ll need storage, because prices will depend on this.

If you’re moving from a rental property you must usually leave it clean and tidy. Not doing so might break your tenancy agreement and your landlord could charge you for the cost of a professional cleaner.

You might want to shop around and pay a professional to clean your property before you leave.

Royal Mail’s Redirection service is a reliable and cost-effective way of continuing to receive mail when you move home.

Do you need to budget for extra childcare or kennels for a pet? Will you have the time or facilities to cook or should you plan for takeaways for a day or two?

These costs can all add up so make sure you include them in your budget.

It’s a good idea to review your budget whenever your financial situation changes.

As you settle in your new home, make time to work out how much you’ve got coming in and going out each month.