The Hidden Costs of Buying a Property: What Buyers Often Overlook

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Buying a home is one of the most exciting – and financially significant – decisions many people make. Whether you are a first-time buyer or moving up the property ladder, it’s easy to focus on the headline figures: the price of the property and your monthly mortgage repayments. However, beyond these costs, there are a number of hidden expenses that, if unaccounted for, can turn your dream move into a financial strain.

In this blog, we’ll explore the key costs that buyers often overlook and explain how careful planning can help you budget more accurately for your new home.

1. Stamp Duty Land Tax (SDLT)

One of the most significant additional costs when buying a property in England is Stamp Duty Land Tax. SDLT is payable on properties over a certain threshold, and the amount due varies based on the property’s value, whether you’re a first-time buyer, and if you already own other properties.

For example, if you are buying your first home for £300,000, you may qualify for first-time buyer relief and pay less SDLT. However, if you are purchasing a second property or an investment property, higher rates apply. Misunderstanding or underestimating stamp duty liabilities is a common mistake, particularly if negotiations push the purchase price just above a tax threshold.

Tip: Always check the latest SDLT rates or ask your solicitor for an accurate calculation early in the buying process. They have been increasingly used by successive governments to stimulate housing demand since the coronavirus outbreak.

2. Solicitor and Legal Fees

Conveyancing is the legal work involved in buying a home – comes with its own set of fees. These can range from around £850 to £1,500, depending on the complexity of the purchase and the solicitor you choose.

In addition to standard legal fees, you may face:

• Bank transfer charges for sending money to complete your purchase.

• Land Registry fees for officially registering the property in your name.

• Search fees (local authority, drainage, environmental) which are necessary for due diligence.

Tip: Always ask your solicitor for a full, itemised quote before proceeding to avoid surprises later.

3. Survey Costs

While a basic mortgage valuation is often required by your lender, it is primarily for their benefit and does not guarantee the property’s condition. To protect your interests, it’s wise to commission an independent survey.

Survey options include:

• Homebuyer’s Report (suitable for modern properties): £400 - £800

• Full Building Survey (recommended for older or unusual properties): £800 - £1,500

Surveys can uncover hidden issues such as damp, subsidence, or roof problems. Although an additional cost upfront, it could save you thousands of pounds in repairs or allow you to renegotiate the purchase price.

4. Mortgage Fees

In addition to your monthly mortgage payments, there are often fees to set up the mortgage itself, including:

• Arrangement/Product fees: These can be £1,000 or more and while they can sometimes be added to your mortgage; in doing so, you are increasing your loan amount and interest payments

• Valuation fees: Some lenders offer free valuations, but others charge.

• Broker fees: If you use a mortgage broker, there may be a fee payable for the advice provided.

Tip: Compare the overall cost of a mortgage over the fixed period or loan term, not just the headline interest rate.

5. Removal Costs

Moving your possessions from one home to another can cost more than you expect. Removal costs can vary widely depending on:

• The size of the property

• The distance you are moving

• Whether you require packing services

A full removal service could cost from £500 to over £2,000.

Tip: Get at least three quotes from reputable removal companies and check whether they include insurance for your belongings.

6. Initial Repairs and Renovations

Even a property presented as “move-in ready” often needs minor repairs, redecoration, or upgrades. Common costs include:

• Repainting rooms

• Replacing carpets

• Upgrading appliances

• Garden improvements

Setting aside a contingency fund for these ‘finishing touches’ is essential.

7. Furnishing Your New Home

Furnishing a new home – even with the basics can add up quickly. New curtains, white goods, and essential furniture can easily cost several thousand pounds. Many buyers underestimate how many items are needed to make a new house feel like home.

Tip: Prioritise essential purchases first and spread out the cost of non-essentials over time if possible.

8. Ongoing Costs to Remember

Once you own the property, there are regular costs to account for, such as:

• Buildings and contents insurance

• Council tax (this may be higher for larger properties and different local authorities)

• Utility bills (not just for larger properties, but check the energy performance rating of your new property)

• Ground rent and service charges (for leasehold properties)

These should all be factored into your monthly budgeting from the outset.

Final Thoughts

Buying a property is about more than just affording the purchase price and mortgage repayments. It’s about understanding the full cost of ownership – from legal fees to stamp duty, from surveys to moving expenses. Taking a holistic view of the financial impact will not only reduce stress during the move but also help you start life in your new home on a strong financial footing.

At ACJ Financial Planning, we help clients plan for all stages of homeownership, ensuring that unexpected costs don’t derail your wider financial goals. If you would like a clear picture of how a property purchase fits into your long-term plan, feel free to get in touch.