First-time buyers: Fees and costs

first time buyers

first time buyersBuying your first property can be an expensive thing to do, so it’s important to be aware of all the potential costs you will face before you get started to avoid nasty surprises further along the way.

Remember that you’ll need to make sure you have the money for these costs on top of the money you spend on your deposit.

The key costs when buying a home are:

1. Stamp duty

Stamp duty is a government tax payable when you purchase any property priced more than £125,000. (There are some areas of the country where stamp duty is not payable up to £150,000).

Stamp duty costs are:

Purchase price

Stamp duty rate as a percentage of purchase price

Up to £125,000


Over £125,000 to £250,000


Over £250,000 to £500,000


Over £500,000 to £1,000,000


Over £1 million


2. Solicitor/Conveyancing costs

Your solicitor can be key to the smooth running of your house purchase, so it’s important to make sure you choose them based on a recommendation – don’t necessarily opt for the cheapest, this may not turn out to your advantage!

Taking into account all the work a solicitor does on your home purchase, you can expect to pay between £1,000 and £1,200.

3. Lender fees

Most banks and building societies charge a fee for giving you a mortgage.  They call it an arrangement fee, a completion fee or booking fee.

A typical fee is between £500 and £1,000 and can often be added to the mortgage (although by doing so you will be increasing the interest you pay).  There are some deals without any fees, but the interest rate can be higher, meaning you end up paying more in the long run so make sure you do your maths.

4. Broker fees

A good way of securing a good mortgage rate is to use a broker.  A typical fee can be anything from £300 to 1% of the purchase price.  Be sure to find out what they are doing for that fee and make sure you are not paying over the odds.

5. Moving costs

Moving costs are often forgotten, but are a cost involved in buying a home all the same.  Depending on the distance and amount to be moved you can expect to pay between £500 and £1,500.

Scott Rawlings is Director of Mortgages at Radcliffe & Newlands and has been an IFA for over 11 years.  In that time he has helped over 2000 clients on their property/mortgage journey.  When he’s not helping clients he’s either being kept busy by his two children Isabelle and Ben, or finishing off refurbishing his home which seems to be a never-ending task!