Costs of Buying a House

Upfront Costs

The costs of buying a house can be divided into upfront and ongoing costs. Upfront costs may not all come in one lump, but they’re payments you’ll have to make in order to move in. Ongoing costs are the payments you’ll have to continually make in order to maintain your ownership.

Usually between 5% - 20% of total value of the house

Deposit

Your deposit will probably be the first large chunk of money that you’ll be parting with during the house purchasing process.  The deposit is the initial lump sum required by the seller to secure the property. Your purchase will be split into two parts: the mortgage (your loan), and your deposit (your own money, which represents your equity in the property or how much you own outright). Your deposit will be calculated as a percentage of your total house price, The deposit is typically a percentage of the total purchase price, and the specific amount varies depending on the lender's requirements and the property itself.

£2,003 on average

Conveyancing Fees

Conveyancing (link to Strike conveyancing page)  refers to the legal process involved in transferring ownership of a property. Engaging either a solicitor who specialises in conveyancing or a licensed conveyancer is necessary to handle the legal side of the purchase. This includes drafting contracts, arranging disbursements and exchanging contracts. Conveyancing fees can vary depending on the complexity of the transaction and the organisation or person you choose to go with. In general, though, they tend to be split into:

1. The cost of their service, and -

2. Disbursements  (which are repayments to your conveyancer for the extra charges they pay on your behalf to 3rd parties for things like Local Authority Searches, Water and Drainage Searches etc.)

£649 on average

Removal Costs

Buying a property often involves a physical relocation. If yours does, then you may require professional assistance. You may want to do all the heavy lifting yourself, or with your mate Dan the Van Man who owes you a big favour. In general though, remember that removals and moving can be time-consuming, physically strenuous and quite stressful. If you’re doing it on your own? We admire you. If you require professional help? Remember to budget for it. Removal costs depend on factors such as the distance, number of stairs, the volume of belongings, and additional services like packing and unpacking. It is advisable to obtain quotes from several reputable removal companies, ensuring they are adequately insured and have positive customer reviews. Planning ahead and booking removal services in advance can help minimise costs.

Between £300 and over £1000 on average

Survey Fees

After your offer has been accepted and before you exchange contracts is the prime time to conduct surveys. What are they? Surveys are designed to uncover any issues that might not have been visible to the untrained eye (i.e. the eye that’s more focused on the jacuzzi feature in the bath, than the black mould on the ceiling.) Whilst surveys aren’t cheap, they could save you buying a house that has fundamental flaws that you’re not willing to face. Surveys also save you money on repairs later, as you could request that the seller makes repairs before the sale can advance. Alternatively, you could request that the seller reduce the price if you find issues like structural flaws or mould etc. The cost can vary depending on the value of the house and the level of survey you want to have done. You can get a basic survey, or a very thorough one.

£250 on average

Mortgage Valuation Survey

Your mortgage lender may want to conduct a survey in order to check that they’re lending you the right amount of money. They want to avoid lending you a mortgage that is beyond the value of the house. That would be risky for them, especially when you came to sell the house and could potentially find that the house is valued at less than when you bought it, and you’re unable to pay back the mortgage in full. Though they used to be very common, lenders often don’t do it these days. Some mortgage companies may try to entice you with a free valuation, but they generally cost upwards of £250.

£4,544, based on a fee of 1.42%

Estate Agent Fees

Most estate agents will charge you for the service. Some charge a flat fee, whilst others charge as a percentage of the sale price of the property.

Here at Strike we don’t believe in doing things a certain way, just because it’s been done like that for a long time. We’re mixing things up and pride ourselves on charging 0% commission for our estate agent fees. No hidden costs, no last minute surprises - just a free estate agent. What do we charge for? Optional add-ons. And YES these are actually optional, there’s no obligation to use our add-on services. Our add-ons include things like our financial services (who can sort you a great mortgage deal) and removal services. 

So, you could use Strike as your estate agent and come out with a bill of £0. That’s a big saving when you consider that the average cost of an estate agent is £4,544.

£300 on average

Insurance

Home insurance is necessary to protect your property against unforeseen events. You can get different types of insurance depending on your property and the sort of cover you want, but most people opt for a combined building and contents policy. This means both the property itself and the contents within are protected. You can talk to your insurance company about what policy might work for you, as you will want to avoid both getting too little cover or being over-insured and paying too much. Most mortgage lenders require buildings insurance to be taken out to cover your home for the term of the mortgage. You can compare insurance deals to find the best deal for you.

There are other costs too, including:

• Water, gas and electricity bills - these bills will vary, but will probably add up to a couple of hundred pounds a month. You can use a bills calculator to work out how much you might be paying. Though bills have increased in 2023 due to inflation, the government is offering some discounts, which you can explore on their website. 

• Council tax – this is paid to your council each month. It will vary depending on who your local authority is and the size of your house. 

• Ground rent – if you live in a leasehold property, you may have to pay ground rent to the freeholder - which is a token fee to essentially rent the land that your property sits on. 

• Service charge – this is relevant if you live in a shared building, like in a flat. Service charges cover the maintenance and management of your building, like for shared spaces and services. You may also contribute to a fund for repairs and redecoration of communal areas, like hallways, lifts and roofs. 

• Residents’ parking – in some areas you will have to pay to park your vehicle on the street. You tend to buy the permit for 6 months or a year. You can also usually purchase passes for visitors.

• Maintenance and building work – though you will have had a survey to look for issues in the property before you bought it, unexpected repairs can pop up. When you’re renting, it’s usually the responsibility of the landlord to deal with the boiler breaking or some damp on the walls. When you own the property, you have to budget for these unexpected costs. 

• Television, broadband, cable and telephone – these are optional costs, but most people require wifi at least. You should find out who your local provider is before moving in – you could see who the previous owner used.