As a first-time home buyer, finally getting your deposit in place to make a mortgage application is a huge deal. And being able to save enough money for a good deposit can dictate a lot of how the next steps in the process go. After all, lenders prefer a larger sum of money for a deposit.
But what about the rest of the costs? Because your deposit isn’t the only thing you’ll need to pay for upfront before you have an offer accepted on a property.
This post is going to look at some of the costs many first-time buyers don’t realise they need to pay for upfront when buying property.
Solicitor and Conveyancing Costs
When you buy any property, you’ll need a solicitor or licensed conveyancer to handle the legal side of the purchase. This includes searches, contracts and transfers of ownership. The cost of this can vary, but generally it runs between £1,000 and £2,000, depending on the property and the firm.
However, you need to make sure you know what you’re paying for so you’re not left paying disbursements on top of this. Ask for a full breakdown to see what is and isn’t included so you know how much exactly it’ll cost. For example, if a local authority search isn’t included, this can be an extra £250 to £300, and this is payable even if the sale does not complete.
Mortgage Broker and Arrangement Fees
If you’re working with a mortgage broker such as Everest Mortgages, then they will likely either charge a flat fee or a percentage of the loan or be paid by commission from the lender. Always check when you enquire with brokers as to how they get paid before you engage their services. Because the arrangement fee for the mortgage is on top of this. So if your mortgage broker charges a flat fee of around £500, for example, then you will have the arrangement fee on top, which is typically £999 to £2,000, but it can vary.
Stamp Duty Land Tax
The amount for when stamp duty kicks in changed in April 2025, and it’s now £300,000, so for any property purchased above this threshold,d you’ll need to pay the applicable rate on anything over £300,000, so if the property is £350,000, then you pay 5% (correct as of time of publication) on the £50,000. It’s worth calculating this into your budget if you’re looking for properties in the price range or exceeding £300,000.
Survey Costs
A mortgage valuation is not a survey, and you must understand this. A valuation will tell the lender what the property is worth and if it’s worth what you’re borrowing for it. It does not tell you anything useful about the condition of the building.
A survey to give you an idea of the condition of the property can range from £300 to around £1,500, depending on the property company and the complexity of the survey. You can choose a level 1, 2 or 3 survey, with a level 1 being the cheapest and level 3 the most expensive option.
Feature image by Jakub Zerdzicki on Pexels.
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