Additional costs first time buyers should save for

Additional costs first time buyers should save for 

If you're planning to buy your first home, you probably know you'll need to:

• Save a deposit.
• Commit to monthly mortgage repayments.

But those aren't the only costs to plan for.  Here's a simple guide to the extra expenses that can take first time buyers by surprise; and how to prepare for them.

Stamp Duty (or equivalent)

This is a tax you might need to pay when buying a home. The name and rules vary depending on where you life. For example:

• In England, it’s called Stamp Duty Land Tax (SDLT)
• In Wales it’s called Land Transaction Tax (LTT)

You only need to pay this if the cost of your property is over a certain value.  The rules and amounts vary across the UK, and first time buyers can often get a discount or an exemption. Check the latest thresholds on your government's website. 

Legal fees 

A solicitor or conveyancer will manage the legal parts of your house purchase; things like  drawing up contracts, carrying out local searches and registering your ownership of the property. 

The fees may vary depending on the value of your home and where it's located.   

House survey 

Your mortgage lender will carry out a mortgage valuation to make sure that the property they’re lending you money for is worth what you’re planning to pay for it. 

This valuation is for the lender’s benefit, so it's a good idea to get a separate survey to check the condition of the property.  If any problems are found, you can always go back to the estate agent and renegotiate your offer. 

You can choose from: 

• Homebuyers report.
• Full structural survey.
• Snagging survey (usually for new builds).

These vary in scope and cost, depending on your property's size, location and value. So weigh up all your options and decide what's best for you. 

Local searches 

Your solicitor or conveyancer will carry out local searches to check things like: 

• Planned roadworks or developments nearby.
• Flood or drainage risks.
• Legal restrictions on the land. 

Land registration fees

Once the sale goes through, your solicitor will register the property in your name. The cost depends on the property's value.  

Land and property are dealt with by HM Land Registry in England and Wales.  

Mortgage costs 

As well as your monthly repayments you may have to pay fees like:

• Booking fee
• Arrangement fee
• Valuation fee
• Electronic transfer fee

Costs differ from lender to lender. And some lenders add these costs to your mortgage. Others ask for them to be paid upfront. Make sure you check the details. 

Moving costs 

The cost of physically moving home depends on how much help you need. You may be able to do lots - or all - of the work yourself. Costs can include:

• Hiring a van or removals company
• Buying packing materials
• Paying for storage

You might be able to cut costs by calling on friends or family to help.  

Feeling overwhelmed? 

There's a lot to think about - but don't worry! With a bit of planning and patience, you can make it happen.

Try our free app for first time buyers. Set savings goals, track your progress, and build confidence as you move towards home ownership.