GET IT RIGHT FIRST TIME: Sarah is here to help first time buyers get to grips with the conveyancing process. This month, she highlights just how costly moving house can be…
After the Christmas excess, money is tight for many of us in January. If you are planning to buy your first home this year, you may have already saved for a deposit, but now it’s time to start thinking about the fees you are likely to incur as the transaction progresses.
How much do solicitors charge to handle my house purchase?
Whilst solicitors’ costs will vary, they all include several important items, as well as their fees.
You may wish to contact a number of firms for comparable quotes before making a final decision. Ask for a written estimate, together with their terms and conditions, so you are fully aware of what to expect. Most will email you a breakdown of costs, so you can compare like for like.
Don’t forget you will need to have your deposit money readily available to transfer to your solicitor, so you are in a position to exchange contracts when the time comes. You will also need buildings insurance in place and any life insurances you are taking out, so make sure you have sufficient funds to cover the premiums.
What do searches cost?
Included in the quotes you receive from solicitors will be the price of the searches that need to be undertaken on the property you are buying. These are a must if you require a mortgage.
Most commonly, they tend to include local, drainage, mining and environmental searches and some form of chancel check, which are likely to amount to around £300.
In addition, you will also have to pay a Land Registry fee to ensure the property is transferred into your name on completion. This cost is determined by a sliding scale, based on the value of your house and will also be included in your solicitors’ quotes.
As a first time buyer, do I have to pay Stamp Duty?
There are various different scales for Stamp Duty Land Tax. First time buyers benefit from relief up to £500,000 (i.e. there is no tax to pay), provided you intend to live in the property as your only or main residence.
Are there any other costs I need to factor into my budget?
Most first time buyers require a mortgage and this inevitably incurs fees.
All lenders will want to carry out a survey on your property – some may offer a free valuation as part of their package, but others will charge you. In addition, you will have to pay a mortgage arrangement fee to your bank, building society or financial adviser for setting up the loan. This is normally added to the mortgage, to save you the initial expense, but in some situations, you will have to pay it upfront. There may also be a product fee to pay, that again could be added to the loan, which covers the provision of a particular interest rate, for example.
It may be in your best interests to consider having a detailed survey carried out on the property you are buying, to highlight any structural issues, otherwise known as a Homebuyers’ Report. Again, I’d recommend contacting several firms for quotes prior to commissioning one, so you have an idea of the costs involved.
Finally, don’t forget to budget for moving expenses. The cost of removals will vary, depending on whether you want the firm to pack for you, the amount of furniture you have and the distance to be travelled.
If you are a first-time buyer with a question about moving home, our residential property expert, Sarah Gaunt, would love to hear from you. Email: firstname.lastname@example.org