Hidden Costs to Homebuyers
Britain has long been a nation of homeowners. An Englishman’s house was considered his castle long before Edward coke enshrined it into law in 1628 and an Englishwoman’s home is no less so. Even given the fact that those below the age of forty are finding it increasingly difficult to get their foot on the property ladder and regardless of the presentation generation widely earning the sobriquet ‘generation rent’, the aspiration to own our own property has not fallen from its position of prominence within the country’s collective consciousness.
Gaining that all important foothold on the first rung of the property ladder remains a primary goal for the majority of Brits. The average age of first time buyers seems to be rising year on year and there is great discrepancy in average first time home buyer age across the country, ranging from 35 in the Midlands and the North to 52 in London and 48 across other areas in the south of England. Besides this, 62% of first time house buyers now rely on the Bank of Mum and Dad to help them on to the property ladder and the average age of second time buyers nationwide is now well over 50.
However, even for those who are able to buy houses nowadays, things are not as simple as some believe. When you come to buy your house, things are certainly not as simple as securing the mortgage, collecting the keys and then deciding where the sofa goes so as to avoid any unwanted glare coming off the TV. There are several hidden costs that homebuyers must consider when buying property. In this article National Homebuyers provide advice on the ins and outs of additional expenses that invariably arise as part of purchasing property.
Mortgage Arrangement Fee
It is common practice for homebuyers to have to pay a fee to their prospective lender for arranging their mortgage. This is most payable after arrangement of the mortgage but before completion. You should budget for around £1000 for this expense, though this can often vary. This fee is usually non-refundable, even if the sale falls through for whatever reason.
This is the standard fee the lender charges in order to establish that your property exists, is as it has been described and can provide sufficient security for the loan they intend to provide. Again this fee varies greatly depending on your choice of lender and property value, but as a yardstick around £500 would be a reasonable amount to set aside.
Once again it is difficult to provide exact figures as your legal fees will vary according to the value of the property you intend to purchase, amongst other factors. However approximately £800 would be a reasonable amount to set aside to cover your conveyancing fees.
If you are buying a house that costs over £125,000 then you will have to pay a percentage of the house’s value to the tax collector. There are several online calculators that you can use to work out exactly how much stamp duty you will have to pay.
Paying to have the house you wish to purchase surveyed is another considerable cost that arises when you come to buy a house. Surveys can cost anywhere up to £1000, but between £400 and £700 is perhaps more typically representative. It is worth bearing in mind that you may well have to pay for surveys on a few houses before you eventually come to buy a home, so setting aside £2000 for this purpose would probably be sensible.
While it is certainly possible to take on the work involved in moving your belongings yourself, thus limiting costs to around £100, this may not be possible if you have lots of possessions or if you intend to move a long distance from where you sell your home. It is not unusual for removal costs to rise to over £1000 in these circumstances.
Set aside a slush fund to cover the myriad little expenses that can often arise after you buy your house. From dripping taps to terrible wallpaper and loose fittings to DIY botch ups, taken it as a given that there will be several home improvements you need to undertake in your new home. Even simply adjusting the décor to suit your own tastes can often be more pricey than you would think. The best advice would be to save as much as you can for these purposes, as home improvement costs are notorious for unexpectedly spiralling out of control.
This cost will not be applicable to everyone, particularly those who have previously owned another home for a long period of time or those looking to downsize, but other home buyers will have to budget for the purchase of new furniture when moving into a new home. Perhaps your new staircase is too narrow to accommodate your large sofa, or maybe maybe you will need to buy new wardrobes because those in your previous home were built in; there are several circumstances that necessitate the purchase of new furniture and it is something you would be wise to include in your budgeting plans. This is particularly pertinent if you are moving from furnished rented accommodation, as you may have to buy everything from kitchen appliances to beds and living room suites.
National Homebuyers – We Buy Any House
National Homebuyers are a UK based property buyer who really do buy any house or property! In fact we will buy anything, absolutely anything! Whether it is a house, flat or bungalow we will buy it!
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