What's the cost of buying your first home?

First time home

Buying your first home is a real milestone in life. For many people, picking up that set of keys is the final stage in years of saving and working hard to afford their own bricks and mortar. 

The challenge of saving up for a deposit is not the only hurdle; there are additional expenses that will have to be paid in order for the purchase to go through. It is important not to overlook these; if your funds are insufficient, a sale could fall through. 

Let’s look at the main costs involved in buying your first property. 

First time home

Lady in box, man pushing box in new home.

First time buyer house costs

1. Deposit

This is the most obvious one, and it’s usually a significant amount of money. Most mortgage lenders require purchasers to pay a deposit of at least 10% of a property’s value. With the average house price in the UK now over £250,000, this is a huge amount of money to save – and prices could go up again by the time you have saved up. It is best to speak to a professional mortgage advisor to discuss the breakdown of costs and fees.

2. Mortgage arrangement fees

Securing a mortgage on a property carries its own costs. Banks often may charge an arrangement fee of around £1,000 or a fixed percentage of the loan to set it up. Additionally, as well as up to £500 for a valuation survey of the property to confirm it is worth the proposed price. Ask your mortgage advisor about substantial mortgage exit fees.

3. Surveyor’s report

When you’re spending such a significant amount of money, it’s wise to have an experienced surveyor look over the property to make sure it’s a good investment. The most basic survey costs £250, while a full structural survey will can cost £600 or more. 

4. Stamp Duty Land Tax

The government takes a percentage from every house sale in the UK, calculated according to the purchase price. You will pay nothing up to £125,000, 2% on properties costing between £125,000 and £250,000 and between 5-12% if you’re lucky enough to afford anything more expensive than that. Stamp duty is paid on completion of the sale (correct as of April 2016).

5. Solicitor fees

There is a mountain of paperwork to get through to complete the purchase of a property, from checking the seller is truly the legal owner of the house to finding out if they will leave you their fridge. The solicitor is also responsible for the all-important transfer of funds that completes the purchase. 

6. Removal costs

Depending on how much stuff you have, this can cost up to £1,000, although a typical first-time buyer without much furniture could save money by making several trips in a car or hiring a small van instead. 

7. Buildings insurance

This is a must, not least because most mortgage providers insist on you having a buildings insurance policy before the purchase can proceed. Your home buildings and contents insurance cost will depend on the size, type and location of the property. Take a look at our Home insurance for first-time buyers infographic for more information.

8. Furnishing and decoration 

If you’re just moving out of your childhood bedroom, chances are you are going to have to invest in lots of goods for your home: a bed, sofa, washing machine, table, bookshelves – it all adds up. 

Note: We have provided a very basic run through of costs that can be included in purchasing your first house. These details are broad and vary depending on your circumstances. It is best to discuss the details in depth with your mortgage advisor and solicitor to ensure you are clear on all costs during the house buying process.

If you’re buying your first home, you will need buildings and contents insurance you can trust. Let the home insurance team know that you’re a first-time buyer and you’d like a home insurance policy in principle. This will then go live on your chosen date. Our quotes last up to 45 days, therefore, if your purchase takes longer than this, we will go ahead and requote for you.

Home insurance quote

Call Computerquote Insurance for a home insurance quote on 0800 328 5524 or 023 9224 7855 from mobiles.

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