What fees should I expect when buying and selling my home?

The cost of moving home can vary substantially based on several factors, with one of the most significant being whether you’re a first-time home buyer or concurrently buying and selling a property.

As a first-time home buyer, you typically look at costs associated with securing a mortgage, paying for inspections and surveys, and dealing with legal fees. There are also the actual moving costs to consider, including hiring a moving company or renting a moving van, along with potential storage fees if you have items that won’t fit into your new home immediately.

SELLING A HOME WHILE BUYING A NEW ONE

If you’re selling a home while buying a new one, you’ll have to account for all the above costs plus additional ones. These can include estate agent fees for selling your current property, potential home staging costs to make your house more appealing to buyers, and possibly even temporary housing if there’s a gap between your moveout and move-in dates.

Despite these costs, don’t be discouraged. Remember, investing in a home is a significant financial step that can provide long-term benefits. It’s crucial to plan and budget for these expenses ahead of time to ensure a smooth and stress-free moving process.

SO, WHAT ARE THESE POTENTIAL COSTS? MORTGAGE FEES

Mortgage arrangement fee: This is a fee charged by some lenders for setting up your mortgage. You can either pay this upfront or add it to your mortgage balance, although adding it means you’ll pay interest, which could increase your overall repayments.

Typically, these fees range from £999 to £1,999.

Mortgage adviser fee: Engaging a professional mortgage adviser to help you navigate the complexities of finding a suitable home loan can be an excellent decision. You or the lender will pay this, typically calculated as a percentage of the loan amount.

Mortgage application fee: Some mortgages come with an application fee, which is typically non-refundable. This fee ranges from £100 to £300.

VALUATION FEES

Lenders may also charge a fee for assessing the property’s worth to ensure it matches the loan amount. The cost, around £300 to £1,500, depends on your property’s value.

STAMP DUTY

In England and Northern Ireland, first-time buyers are exempt from stamp duty on properties under £425,000. For properties between £425,000 and £625,000, stamp duty is payable only on the portion above £425,000.

In Scotland, first-time buyers don’t pay Land and Buildings Transaction Tax (LBTT) on the first £175,000 of the property.

Land Transaction Tax (LTT) applies to properties over £225,000 in Wales.

SURVEYS RICS HOME SURVEY – LEVEL 2

This survey is suitable for properties in reasonable condition. It aims to pinpoint structural issues such as subsidence and dampness, revealing problems not immediately apparent from a casual inspection.

Whenever applicable, the report will include suggestions for repairs, which could be used to negotiate down the property’s price. The starting cost for this survey is around £400.

RICS HOME SURVEY – LEVEL 3

Also known as a building survey, this is a more comprehensive option, suitable for older or larger buildings or those with unconventional features. This survey starts from around £630.

CONVEYANCER/SOLICITOR FEES

A conveyancer or solicitor handles the legal paperwork during a property transaction. The cost for these services can range between £800 and £1,500. The exact amount may depend on the complexity of the transaction and the professional’s rate.

ELECTRONIC PAYMENTS

Your lender will likely use the Clearing House Automated Payment System (CHAPS), an electronic payment method, to send funds to your solicitor. This service can cost up to £50.

MOVING COSTS

The cost of moving varies depending on whether you do it yourself, hire a van or employ a removal firm. Doing it yourself is free while hiring a van can start from around £65 per day.

A removal firm could charge between £350 and £2,750, depending on factors such as property size and distance.

STORAGE COSTS

If you have items that won’t fit into your new home, you may need to rent a storage unit. Prices for this service depend on the unit’s size.

PET/KENNEL COSTS

During the move, your pets might need to stay at a kennel, which can cost around £22 per day for dogs and £12 per day for cats.

LEASEHOLDER FEES

As a leaseholder, you own the property, not the land or building it’s in. Leaseholder charges vary and often include maintenance costs for communal areas.

ESTATE RENT CHARGE

In freehold residential developments, an estate rent charge is used to secure contributions for maintaining communal areas.

LAND REGISTRY FEES

The Land Registry is responsible for transferring property ownership, and the cost depends on the property’s value. For example, properties valued between £100,001 and £200,000 could cost around £200.

INSURANCE COSTS

You’ll need to have buildings insurance in place as soon as you exchange contracts. This insurance typically covers damages like burst pipes. Contents insurance, on the other hand, covers your belongings. Both types of insurance require careful consideration and multiple quotes to ensure proper coverage.

Finally, life insurance could pay off your mortgage if you pass away, providing security for any dependents. The cost for this type of insurance varies, so obtaining several quotes is advisable.

Don’t forget, our professional friendly advisors are on hand to support you and can help you explore all of your options.