Costs of Buying A House That You Must Budget For

Not sure if buying a house is too expensive?  These are all the key costs of buying a house that you must consider and factor into your budget. 

The costs of buying a house can add up very quickly if you’re not careful. Having a budget of how much you’re spending in each area will help you avoid overspending and unexpected expenses popping up at the last minute.  Costs exist in the following areas:

HOUSE INSPECTIONS
LEGAL FEES
PURCHASE OF THE PROPERTY
MOVING COSTS
SETTLING INTO YOUR NEW HOME COSTS

The amount you spend on each area will depend on your financial circumstances and available budget, but you should know before you move how much you will be spending.

You will see many websites telling you what the average cost of buying a house is, but you should not rely on this and assume it will cost you the same, as this is only an average. This means there will be people spending much more than this and others much less. 

The post is all about the costs of buying a house.

You can also download our costs of buying a house spreadsheet (coming soon!) to complete on our Etsy store. 

1.) HOUSE INSPECTIONS

Surveyor

A surveyor will complete a structural house survey, which checks if there are any underlying issues with the structure of the house, such as signs of subsidence (the ground sinking in).

A survey is essential as if there are any underlying issues with the house, it may affect your house insurance and you may not wish to go ahead with the purchase. You can find a surveyor on The Royal Institute of Chartered Surveyors.  

Additional checks

You may also wish to undertake other checks on the property (that the surveyor won’t usually cover in detail) to reduce the chance of any issues arising, but this will come at an additional cost. These include:

• Electrician to check the electrics, mainly when the house was last re-wired. You can contact the National Inspection Council for Electrical Installation Contracting for help finding an electrician
  
  
• Plumber to check the plumbing, drains and heating system. You can contact the Gas Safe Register or Chartered Institute of Plumbing and Heating Engineers to find a plumber
  
  
• Roofer to check the roof for any loose tiles, wear and tear, faulty gutters, bad insulation etc. You can find a roofer through The National Federation of Roofing Contractors,  Roofing Association or  Confederation of Roofing Contractors 
  
  
• Land registry to check who owns the house and type of ownership. Your solicitor will sort out land registry but you can also look this up online yourself at the official Govt. Land Registry website. Make sure to use this official site as there are lots of private companies offering this service that may charge a higher fee

When to pay these costs?

You should ideally arrange a surveyor and other inspections as soon as you have agreed on the price with the seller and decided that you would like to go ahead with the purchase. Engaging a surveyor and getting a report back can take a minimum of 3 weeks.

It can be useful to get a surveyor's report before you get a solicitor and incur legal expenses. If the surveyor finds something seriously wrong with the property and you decide you don't want to buy it anymore, there would be no need to pay a solicitor. 

You can have a conversation with a solicitor in the meantime saying that you are thinking to purchase and just waiting for the surveyor's report to come back. If the report comes back all ok, your solicitor is ready to go. 

2.) LEGAL FEES

Solicitor's fee

You will need a conveyancing solicitor, who sorts out the legal aspects of buying a house, including drawing up the contract.

Disbursements

In addition to a solicitor’s fee, there will be expenses that the solicitor incurs on your behalf, which you will be charged for (known as disbursements). You should discuss with the solicitor what exactly these charges will be, but they usually include:

• Undertaking various searches which may affect the property, such as any planning applications for motorways, roads or pylon masts being developed outside the house
   
  
• Undertaking additional searches at your request. Solicitors will do a limited number of searches on your property (you should confirm with them what exactly they are). If there is something else you would also like searched, you can request this at an additional cost
  
  
• Transferring the title deed in your name. The title deed is a document that confirms the property belongs to you, which the solicitor will register with the Land Registry

3.) PURCHASE OF THE PROPERTY

Deposit

This is a certain percentage of the property’s price (usually 10%)  that you must pay to the seller through your solicitor to secure the property at the time of exchange of contracts.

Cost of property

This will either be cash (remaining 90%) or your monthly mortgage payments. If you’re getting a mortgage, there will be additional mortgage fees.  

Stamp duty

A tax you pay if you're buying a property in the UK over a certain amount (£250,000). You can check the latest stamp duty costs on the Government’s Stamp Duty Land Tax website. You pay stamp duty to your solicitor, who will then pay this to the Government on your behalf and give you a receipt. 

When to pay these costs?

• Deposit: You should pay this a couple days before the exchange date (when the buyer and seller sign the contract) just in case there are any delays in transferring funds. The deposit must be with the solicitor on the exchange date, as this is when the solicitor will transfer the deposit to the seller’s solicitor. If you pull out of the contract after the exchange date, you will likely lose your deposit.
  
  
• Solicitor's fees, disbursements, remaining cash for the house (i.e. 90%) and the stamp duty: These are due on the completion date specified in the contract and usually paid to the solicitor as one lump sum. It is best to pay the lump sum a couple days before completion date just in case there are any delays. 

Completion date is where the money for the house has been paid to the seller and the property’s ownership is transferred to the buyer. The previous owners must have vacated the property by this date and you will be able to move in (you will receive the house keys and possession of the property).

The exchange and completion dates are agreed between the buyer’s and seller’s solicitors.

4.) MOVING COSTS

Once you have paid the deposit and know your completion date (i.e moving day), you can start arranging the following:

Removal company

Many hire a removals company to transport their belongings and furniture to the new property. You can check out our finding the best removals company post (coming soon!) to ensure you find a good and reliable company. 

Removal Insurance

You should check with your home insurance whether they will cover insuring your belongings during the removals process. This may already be included in your existing house insurance policy or your insurer may charge an additional fee to cover this.

If not, you may have to find another insurance company to cover you for a day or two during the moving period in case your belongings get damaged. 

If you’re using a removals company they may already offer you insurance. However, we believe it is best to use your own insurance company, as the removal company's premium may cost more. 

If you do end up needing to make a claim, you will also have to go through the removals company instead of the insurance company directly, which can make it more difficult. Having more people in the chain can create extra hassle!

Packaging Materials

The removals company will usually provide the boxes and necessary materials for your move (although you should check this with them). It may be more costly going through the removals company, so there is always the option to buy the items yourself.  

If you’re not using a removals company, you may need to purchase the following items:

• Moving boxes
• Packaging labels
• Packaging tape
• Bubble wrap
• Scissors
• Packaging paper/tissue paper
• Plastic covers to protect furniture
• Plant pots to transport any plants
• Rent for a removal van
• Removal trolley to transport boxes
• Ramp for removal van
  

Temporary accommodation for you and storage for your furniture

You may find yourself in a situation where you need somewhere to stay and somewhere to store your furniture and possessions for a few days, weeks or months. This may happen if you’ve sold your existing home and have to leave before your new home is ready, or need some building work done before you move in. 

If so, these are additional costs you will need to factor in:

• Temporary accommodation – hotel or rental property for you to stay for a certain period of time
   
  
• Storage costs in warehouse- usually weekly/monthly charges
  
  
• Storage insurance- your existing home insurance may cover this or you may need to ask another insurance company. Again, it is best to get the insurance directly with an insurance company rather than via another company
  
  
• Transportation of belongings to storage warehouse and from warehouse to new home
  

For transportation to and from the warehouse, it will likely be much easier to use a removals company. Alternatively, you may prefer to do this yourself or with the help of family and friends.

Moving day

If you have young kids or pets, you may want to consider them staying elsewhere during moving day to avoid extra stress. If they’re not staying with family or friends, then you may have additional costs to incur.

• Pet care-i.e. doggy day care for the day
• Child care for moving day
• Disposable cups/plates/cutlery and napkins
• Takeaways/food- you most likely won’t be cooking a big fancy meal on moving day so you might be living off takeaways for a few days
  

When to pay these costs?

For most of the above costs (removal company, temporary storage and accommodation, pet care, and child care), once you decide to move, you should start looking for companies, phone up, and ask how many weeks notice they will need.  Once you have a moving date, you should arrange these services as soon as possible in case they get booked up. 

Most reputable removal companies will ask for payment on the day. However, some may ask for a 10% deposit. You can arrange removal insurance around a week before the removal company arrives. Make sure you don't leave it until the day before in case there are any issues!

If you're not using a removals company, we recommend ordering your packaging materials as soon as you know you're going to move, so you can pace yourself when packing up. 

5.) SETTLING INTO YOUR NEW HOME

House Insurance

It is highly recommended that you purchase home insurance (both Buildings and Contents Insurance) to protect your house and belongings. In the event that something goes wrong, the insurance will cover the cost rather than you being left with a huge bill ! 

If you already have house insurance, you will usually have to get a new policy. Your old house policy will end and a new policy issued at the date you specify.

Changing address costs

• Redirecting mail cost

There will be many people that you will need to inform of your change in address (check out our change of address checklist!), but redirecting mail is the one you will be charged for. 

Safety

• Changing existing locks on the property
• Cuts of new keys

Initial cleaning costs (if desired)

• Professional cleaner
• Additional cleaning products
• Gardner to tidy up outside

Household costs

• Water
• Gas
• Electric
• Internet
• TV license
• Landline/Phone
  
• Council tax- a tax paid to local authorities to fund the services they provide i.e. rubbish collection, street lighting etc. You can pay your council tax online using the Government’s pay council tax website
  
• Parking
  
• Maintenance costs

Additional costs

You should also consider whether there are any additional costs that you need to factor into your budget. These include:

• Repairs
• Refurbishment costs
• Any new appliances or items (i.e water softener)
• Any new furniture

When you view a property, you should get a good sense of what additional work needs to be done and additional items you need to buy (as long as you ask the right questions!)

You can check out our ultimate house viewing checklist (with over 101 questions to ask!) to make sure you don’t have any unexpected expenses further down the line.

When to pay these costs?

• On the completion date specified in the contract, you will become responsible for house insurance. You should call your home insurance at least 2 days before completion date to make sure it’s all set up in time. If you're not sure on the insurance provider you'd like to go for, you can start researching a month in advance just to get all the info to help you decide
  
  
• We recommend setting up a redirect of your mail around 3 weeks before you move via the Royal Mail’s re-direction service
  
  
• Changing the locks can only be done on the day you move in (usually late afternoon to ensure all the seller's stuff is gone). However, you can book the locksmith in advance once you have your moving date confirmed. The same applies for any cleaning, repairs or building work you would like done
  
  
• Household costs are ongoing costs that you will usually pay monthly or make a one-off payment for

Key Takeaways

When buying a house, it is essential to have a clear idea of all the costs at the start, otherwise you may find yourself rapidly running out of cash and exceeding your budget.

The costs of buying a house are in 5 key areas; house inspections, legal fees, purchase of the property, moving costs, and settling into your new home.

This post was all about the costs of buying a house.

If you found this helpful, you can view our upcoming content on our coming soon page to see what's next !