The UK housing market has begun to rally again, with prices slowly creeping up after an extended slump last year. This is great news for sellers but not so great for first-time buyers who may end up needing a larger deposit. But if you are ready to buy and have your deposit saved, it’s important to remember there are other costs involved in buying a home.
Here are five essential things every first-time buyer should include in their budget.
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1. Conveyancing Fees
Conveyancing is the legal process of transferring property ownership from the seller to the buyer. As a first-time buyer, you’ll need to hire a solicitor or conveyancer to handle this process for you. Conveyancing fees typically range from £800 to £1,500, depending on the complexity of the transaction and the location of the property.
2. Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax is a tax you pay when purchasing a property in England and Northern Ireland. As a first-time buyer, you may be eligible for relief on properties costing up to £625,000. However, if your property exceeds this threshold, you’ll need to budget for SDLT. The tax is calculated based on a sliding scale, with rates ranging from 5% to 12% depending on the property’s value. Use the government’s Stamp Duty Land Tax calculator to estimate how much you’ll need to pay.
3. Survey Costs
Before finalising your property purchase, it’s crucial to have a survey conducted to assess the condition of the property. There are several types of surveys, ranging from a basic valuation survey to a comprehensive building survey. Prices vary depending on the type of survey and the property’s size, but for most buyers, an RICS Home Survey Level 2, also known as a home buyers survey, is sufficient. This will cost in the region of £500. A survey can help identify potential issues with the property, saving you from costly surprises down the line. Look for a local RICS property surveyor familiar with the area, such as a house surveyor in Norwich.
4. Moving Expenses
Moving into your new home comes with its own set of expenses. You’ll need to budget for hiring a removals company or renting a van if you plan on moving yourself. Costs will vary depending on the distance of your move and the volume of your belongings. Additionally, consider the cost of packing materials, such as boxes, bubble wrap, and tape. Setting aside £500 to £1,000 for moving expenses is a good starting point.
5. Home Insurance
As a homeowner, you’ll want to protect your investment by obtaining home insurance. There are two main types of home insurance: buildings insurance and contents insurance. Buildings insurance covers the structure of your home, while contents insurance protects your personal belongings. Premiums will vary depending on factors such as the property’s location, size, and age, as well as the level of cover you require. Budget for at least £200 to £400 annually for a combined buildings and contents insurance policy.
Purchasing your first home is a significant financial commitment, and it’s essential to be aware of all the costs involved. Remember to thoroughly research each cost and shop around for the best deals to ensure you’re getting the most value for your money.
Barry Lachey is a Professional Editor at Zobuz. Previously He has also worked for Moxly Sports and Network Resources “Joe Joe.” he is a graduate of the Kings College at the University of Thames Valley London. You can reach Barry via email or by phone.