The fees you can expect to pay when purchasing a home in the UK

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If you’re looking to buy a home in the UK, then it helps to be aware of some of the costs you may encounter. Although this is not a definitive list by any measure, it’s a good overview of what to expect with regards to rates and their timings.

Deposit –According to experts, you should look to deposit around 40% of the total cost to get the best rates with the mortgage lender. However this is not a firm rule observed by everyone, usually a 5-10% deposit will be sufficient for a decent mortgage plan.

Stamp duty land tax –This is a tax on land transactions in England, Northern Ireland and Wales; Scotland will also have their own version of this tax but we’ll focus on that in another article. Here’s a table to quickly understand the segmentations:

 
Stamp Duty Segmentation in England, Northern Ireland, and Wales
First £125,000 £125,001 - £250,000 £250,001 - £925,000 £925,001 - £1,500,000 above £1,500,001
none 2% 5% 10% 12%
 

Valuation fee – Valuers are professionals commissioned by the mortgage lender to help determine the appropriate amount to lend. Rates vary but expect to pay between £150 - £1,500.

Surveyor’s fees – A surveyor’s work applies to the secondary homes market, or homes that are sold by the owner (or title deed holder) but not the property developer. Without a survey you may not be aware of costly work that needs to be done on a property.

Solicitor/Legal fees – Solicitors will be involved in the drafting of legal documents and the conveyancing of the property to your name. Again the cost will vary depending upon the value of the property.

Broker fees – Real estate brokers will act as intermediaries between yourself, the developer, lender, and even conveyancer. They basically represent your interest throughout the whole transaction and they charge you between a 0.5% - 3.5% fee.

Mortgages - Mortgages are secured payments against the property that are usually provided by a bank to qualified individuals. It’s best to shop for the best mortgage option as there will be many providers offering all sorts of schemes to your benefit. That being said, it’s also worth speaking to your own bank as they will sometimes provide special deals for existing customers.

Insurance - Mortgage lenders will also insist on an Insurance policy to protect their interest in the property. Make sure that you have the right protection to give yourself and your family the peace of mind that your mortgage will be paid off in case of the worst.

Side note: International buyers will find it easier to navigate the purchasing process if they buy in cash and forego securing a mortgage - cash buyers also benefit from higher rental incomes right away. Read more here

Council tax - The amount you will pay in England and Scotland is based on the valuation band your property falls under, its location and whether or not you are entitled to a discount. Northern Ireland properties are taxed on an individual basis.

Utilities – Be prepared to spend o electric, gas, water, line rentals, phone, broadband and cable service.

Maintenance and repairs – Newly-built properties won’t be needing much maintenance, if any at all.

 
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To learn more about how Chestertons can help you navigate the UK property purchase process, please send us a message at newhome@chestertons.com, you can also call or whatsapp +44 785 290 1523 for a free consultation.

rafael mondonedo