The cost of being a first time buyer
April 2024
The cost of being a first time buyer
April 2024
Whether you’re moving out of your family home or switching from renting to owning, buying your first house and making it truly feel like yours is a huge and exciting moment in your life.
But when it comes to stepping onto the property ladder, it’s important to be aware of the many costs involved in the home buying process. In this article, we help guide you through every step of the process, making sure you feel confident and ready for your homeownership journey.
Legal fees
When buying a house, you’ll have to speak with a specialist solicitor, called a conveyancer. They will help with the legal side of buying your first home. They’ll check contracts, look into the history of the property, and make sure there are no issues like flooding or upcoming construction. Solicitors are trained to handle tricky legal problems, protecting you from the unknown and giving you peace of mind.
Solicitor fees often vary depending on the size of the home, with the average fee in the UK being £2,3391. Our First Time Buyer Economy research2 found that almost a quarter (23%) of first time buyers were unaware of these fees.
Many estate agents will be able to introduce you to a preferred solicitor, but it’s also well worth shopping around and comparing prices from different solicitors before making a final decision.
Stamp duty
One of the biggest fees many people face in the home buying journey is stamp duty, which is a tax the government asks for when you buy a property. How much stamp duty you pay depends on the value of your new home. In the UK, stamp duty is set at 5% for properties bought for between £250,000 to £925,000, rising to 12% on properties over £1.5 million. However, the great news is that as a first time buyer, you don’t have to any pay stamp duty3 on the first £425,000 of your home’s value.
Product fees
These are fees you pay when taking out a mortgage. They can either be paid up-front or added to the loan, where a lender allows. For some mortgages, the fee may be up to £2,000+4. Others might not have a fee but could have a higher interest rate.
Survey and valuation fees
Did you know that almost half (49%) of first time buyers2 get a surprise with survey and valuation fees when applying for their first mortgage? It’s true! When you’re ready to get a mortgage, the lender will ask for a survey of your property. This is to make sure the house is really worth the price you and the seller agreed on, and it involves some fees to pay the surveyor.
While this might sound like just another expense, this survey may actually uncover hidden issues with the property, giving you a chance to negotiate the price down if there are problems you didn’t know about.
Home renovation costs
Once the home is officially yours, you can get creative and potentially invest in the comfort, energy efficiency, and personalisation of your space. You may find that it’s not necessary to start any big renovations or redecorating projects, of course, but our research has found that first time buyers spend an average of £5,187 doing work in the first 12 months.
The costs of home renovation can be kept down if you’re willing to roll up your sleeves and embrace the do-it-yourself approach. You could also use reclaimed or second-hand materials, which is not only good for your budget but good for the environment too!
Other costs
If you have a lot to take with you to your new home, then hiring a professional removal service is the best way to ensure that it all makes it to your new home in one piece. The cost of this service changes based on how many things you have, who you hire, and the distance they need to travel.
When we investigated first time buyer experiences, we found all the upfront costs when buying a home typically average £3,3272. It’s important to think about these bills when working out your overall house-buying budget.
Adding up all these costs might feel a little overwhelming, but don’t worry, help is out there when it comes to saving for your first home. At Coventry Building Society, we offer a range of savings solutions like our dedicated account for first time buyers – the First Home Saver account – to help get you on the path to saving for that dream first home.
First Home Saver (2)
4.80
(Variable)
- Source – How much are solicitor fees when buying a house? - Unbiased
- Source - First time buyer economy report
- Source - Stamp Duty Land Tax: Overview - GOV.UK (www.gov.uk)
- Source - Discover buying costs https://www.zoopla.co.uk/discover/buying/buying-costs/.
- Source - How much does a house survey cost https://sdlsurveying.co.uk/news/how-much-does-a-house-survey-cost-in-2023/
Information correct as at April 2024.
First Home Saver (2)
4.80
(Variable)
Related articles:
10 steps to buying your first home
A step by step guide of what you need to know.
Whether you’re moving out of your family home or switching from renting to owning, buying your first house and making it truly feel like yours is a huge and exciting moment in your life.
But when it comes to stepping onto the property ladder, it’s important to be aware of the many costs involved in the home buying process. In this article, we help guide you through every step of the process, making sure you feel confident and ready for your homeownership journey.
Legal fees
When buying a house, you’ll have to speak with a specialist solicitor, called a conveyancer. They will help with the legal side of buying your first home. They’ll check contracts, look into the history of the property, and make sure there are no issues like flooding or upcoming construction. Solicitors are trained to handle tricky legal problems, protecting you from the unknown and giving you peace of mind.
Solicitor fees often vary depending on the size of the home, with the average fee in the UK being £2,3391. Our First Time Buyer Economy research2 found that almost a quarter (23%) of first time buyers were unaware of these fees.
Many estate agents will be able to introduce you to a preferred solicitor, but it’s also well worth shopping around and comparing prices from different solicitors before making a final decision.
Stamp duty
One of the biggest fees many people face in the home buying journey is stamp duty, which is a tax the government asks for when you buy a property. How much stamp duty you pay depends on the value of your new home. In the UK, stamp duty is set at 5% for properties bought for between £250,000 to £925,000, rising to 12% on properties over £1.5 million. However, the great news is that as a first time buyer, you don’t have to any pay stamp duty3 on the first £425,000 of your home’s value.
Product fees
These are fees you pay when taking out a mortgage. They can either be paid up-front or added to the loan, where a lender allows. For some mortgages, the fee may be up to £2,000+4. Others might not have a fee but could have a higher interest rate.
Survey and valuation fees
Did you know that almost half (49%) of first time buyers2 get a surprise with survey and valuation fees when applying for their first mortgage? It’s true! When you’re ready to get a mortgage, the lender will ask for a survey of your property. This is to make sure the house is really worth the price you and the seller agreed on, and it involves some fees to pay the surveyor.
While this might sound like just another expense, this survey may actually uncover hidden issues with the property, giving you a chance to negotiate the price down if there are problems you didn’t know about.
Most homebuyers tend to go for a standard homebuyer survey, but there are different options for different types of houses. For example, older properties may require a more extensive evaluation compared to new builds. Because of this, the cost of these surveys can vary from around £400 to £1,425 on average5.
Home renovation costs
Once the home is officially yours, you can get creative and potentially invest in the comfort, energy efficiency, and personalisation of your space. You may find that it’s not necessary to start any big renovations or redecorating projects, of course, but our research has found that first time buyers spend an average of £5,187 doing work in the first 12 months.
The costs of home renovation can be kept down if you’re willing to roll up your sleeves and embrace the do-it-yourself approach. You could also use reclaimed or second-hand materials, which is not only good for your budget but good for the environment too!
Other costs
If you have a lot to take with you to your new home, then hiring a professional removal service is the best way to ensure that it all makes it to your new home in one piece. The cost of this service changes based on how many things you have, who you hire, and the distance they need to travel.
When we investigated first time buyer experiences, we found all the upfront costs when buying a home typically average £3,3272. It’s important to think about these bills when working out your overall house-buying budget.
Adding up all these costs might feel a little overwhelming, but don’t worry, help is out there when it comes to saving for your first home. At Coventry Building Society, we offer a range of savings solutions like our dedicated account for first time buyers – the First Home Saver account – to help get you on the path to saving for that dream first home.
First Home Saver (2)
4.80
(Variable)
- Source – How much are solicitor fees when buying a house? - Unbiased
- Source - First time buyer economy report
- Source - Stamp Duty Land Tax: Overview - GOV.UK (www.gov.uk)
- Source - Discover buying costs https://www.zoopla.co.uk/discover/buying/buying-costs/.
- Source - How much does a house survey cost https://sdlsurveying.co.uk/news/how-much-does-a-house-survey-cost-in-2023/
Information correct as at April 2024.
Related articles:
10 steps to buying your first home
A step by step guide of what you need to know.
