What costs are involved when buying a property?

When you are considering buying a house or flat, it is crucial to understand the costs involved. Budgeting will help you avoid surprises down the line, so let’s take a closer look at the key expenses.

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Mortgage costs

Most mortgages come with upfront fees, also known as arrangement fees. While some deals are fee-free, they often carry higher interest rates.

Many people took advantage of the government’s Help to Buy scheme, which closed in March 2023. If you are in this position, it is essential to bear in mind the Help to Buy loan repayment. During the first five years, no interest on the loan is incurred; however, once this period concludes, you will incur an interest fee of 1.75 per cent. These interest payments are made monthly and the rate will increase each year based on the RPI plus an additional 2 per cent. For more information on Help to Buy loan repayment, contact a specialist such as https://www.samconveyancing.co.uk/news/conveyancing/help-to-buy-loan-repayment-5182.

House survey costs

Your lender’s valuation focuses on the property’s worth rather than structural issues, so an independent property survey is important. The cost varies depending on the type of survey and property price. You can read in more detail about the different types of house surveys here.

Conveyancing fees

Conveyancing involves legal aspects, so using a property solicitor or licensed conveyancer is recommended. Fees include legal fees, money transfer fees, HM Land Registry fees, searches, and leasehold fees. Legal fees typically range between £500 and £1,500, depending on the property type and complexity. HM Land Registry fees vary based on property price.

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Stamp duty costs

Stamp duty is a tiered tax on land and property transactions. First-time buyers enjoy exemptions on properties up to £425,000, while home movers pay standard rates on properties above £250,000.

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