Costs Of Buying A Home For First Time Buyers

House hunting can be exciting but it can also be rather daunting and time consuming, no matter how many times you've been through the process, but even more so for a first time buyer. When buying a house it is important to factor in all the upfront costs, mortgage costs and on going costs involved in buying and running a property. You've probably asked yourself where do I start? Well aside from your monthly mortgage payments here are the main cost factors that you need to budget for when buying a home.

1. Be sure you can afford it

Before looking at properties, you'll need to save for a deposit. Avoid setting yourself up for disappointment by getting your sums straight first. Do your homework and see how much you'll need to borrow and work out how much deposit you require. Generally, you need to try to save at least 5% to 20% of the cost of the property you would like. For example, if you want to buy a home costing £150,000, you’ll need to save at least £7,500 (5%). Saving more than 5% will give you access to a wider range of cheaper mortgages available on the market and will be worth it in the long run.

2. Budget for any upfront costs of buying a home

Survey costs - A survey is essential to and will also make you aware of any underlying issues that the house may have such as asbestos. If the home you are interested in buying has asbestos you may wish to seek advice from specialists in asbestos claims such as Your Legal Friend. They want to help encourage house hunters and new homeowners to be aware of the dangers of asbestos in residential properties (it is possible for any house built before the year 2000 to contain it) and be safe if they decide to buy, decorate or renovate. Survey's can cost anything from £250 to £1000. There are three types of surveys which include a condition report, a homebuyer report and a buildings survey. The type of survey required tends to vary in accordance with the age of a property.

Valuation feeThis is charged by the mortgage lender to assess the value of your property to determine how much they are prepared to lend you. Depending on the value, the cost can be between £150 to £1,500. Some lenders may not charge depending on the mortgage type.

Solicitor’s (Legal) fee - To help you through the property buying process you will need to hire a solicitor or licenses conveyancer to handle the legal aspects of the purchase, otherwise known as conveyancing. They will be responsible for drawing up contracts doing local searches, sorting out the stamp duty and transferring the payment for your property. Fees will vary but you should typically allow between £500-£1500. Some solicitors will charge by the hour where as others will do the job for a set amount so it's worth asking for these fees upfront. 

Removal costs - If you're moving from a your parents house you'll most likely not have that many belongings so may only need to hire a van or require help from friends and family to move. However, if you are currently in a rented properly you're more than likely to have built up a house full of furniture and have many items so hiring a removal van may be worth while. This can cost anything from around £1000 right up to several thousand pounds depending on what services you require. It's a good idea to de-clutter before you get an estimate as some companies charge you according to how much stuff you have. 

Stamp Duty - Stamp duty land tax is a tax charged on all purchases of houses, flats, land and buildings in England, Wales and Northern Ireland. Purchases that cost less than £125,000 are exempt from the tax. Stamp duty can be a fairly hefty charge, so it's important to factor it into your budget. The amount of stamp duty buyers pay varies depending on the price of the property. Go to Zoopla's stamp duty calculator to work out how much tax you will need to pay on your property.

3. Be aware of any hidden costs

Buildings insurance - Most lenders will require that you have buildings insurance so that you are covered in the event of structural damage occurring to your home. This type of insurance typically protects you from having to pay out against events such as flooding, a fire or subsidence. The amount that you have to pay for home insurance will generally depend on factors such as the size of the property, its location and how much cover you want for your possessions. If you are buying a leasehold property, it is possible that the cost of building insurance will be included in your service charges. To find the best deals on home insurance shop around on comparison websites like uSwitch

Initial furnishing and decorating costs - Many buyers don't factor in the cost of furnishing and decorating the house. The house may not be to your taste so you may wish to decorate, or put in a more modern kitchen and bathroom. All of which costs extra money.

4. Don't forget about ongoing costs

Council taxThe amount you will pay in England and Scotland is based on the valuation band your property falls under, it’s location and whether or not you are entitled to a discount. Northern Ireland properties are taxed on an individual basis. If you are buying a property on your own don't forget to apply for 25% single occupancy discount. 

Utilities - It's always a good idea to ask the current homeowner (unless it's a new build) what they spend on utilities to give you a rough idea to plan ahead and estimate your monthly costs. Also don't forget to factor in costs for line rental, broadband and TV. 

Maintenance and repairs Your survey should have highlighted any expected costs involved with necessary repairs, but you will need to budget for regular decorating and diy which you may wish to do further down the line once you've moved in. 

Are you currently buying a house or recently purchased one? I'd love to hear your experience below. 


  1. Oh, great, your article gives me useful information and a fresh perspective on the subject.

  2. Thank you for a great explanation. I was looking online for a similar idea and really appreciate it

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