Buying a home? The hidden costs you may not know about

Buying a home is not just about getting a deposit together, there are many other costs to consider. If you are planning to buy a property, here's what you need to know:

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Costs incurred as part of the buying process

There are numerous costs you should be factoring into your budget before you begin the buying process. These include:

Conveyancing fees

A conveyancing solicitor will handle the legal side of your move. Conveyancing fees vary according to the value of the property and the complexity of the transaction.

Watch out for additional fees that are not included in their conveyancing quote. Many conveyancing solicitors have a list of additional fees hidden away in their terms and conditions. These additional fees can leave homebuyers with a bill far higher than their initial quote.

Certain additional fees are justified. The need to handle a mutual deed of covenant for a flying freehold, for example, constitutes significant additional legal work that would not be identified at the time of quoting; Completing a lease extension at the same time as the conveyancing process is beyond the scope of a standard conveyancing transaction.

Some solicitors charge additional fees for work that really should be included as part of a standard conveyancing process. Additional fees are hidden in the small print to make the initial conveyancing quote look more competitive.

Make sure you read the terms and conditions before instructing a solicitor.

Conveyancing fees range from around £400 to £1,500 inc. VAT

See examples of hidden conveyancing fees:

Potential hidden fees

Typical fee

Additional enquiries fee £50 to £150
Adverse Possession Fee £50 to £150
Alteration of Official Copies Fee £50 to £150
Appointing an Additional Trustee Fee £50 to £150
Auction sale/purchase supplements £50 to £100
Bank transfer (TT Fee) - 1st TT fee included in our fee £25 to £45 (per transfer)
Cheques Returned or Stopped Fee £25 to £50
Cheques to a Third Party Fee £25 to £50
Companies House Search Fee £25 to £50
Copy documents from third parties £25 to £50 (per copy)
Dealing with Apportionments on Leasehold transactions £50 to £100
Dealing with Freeholder of a Property with Leasehold Title £100 to £150
Declaration of Solvency Fee £50 to £150
Freehold Property with a Management Company (dealing with) Fee £50 to £150
Freehold Property with Leasehold Title Fee £50 to £150
Freehold Reversion Fee £50 to £150
Help to Buy Equity Loan Fee £50 to £150
Help to Buy Forces Loan Fee £50 to £150
Help to Buy Redemption Fee £50 to £150
Houses in Multiple Occupation Fee £50 to £150
Indemnity Insurance Arrangement Fee £50 to £100
Inward payment processing fee £25 to £45
Key Undertaking Fee £50 to £100
Lease Extension Approval Fee £50 to £150
Lease Extension Preparation Fee £50 to £150
Legal Aid Charge Transfer Fee £50 to £150
Lender Panel Management Fee £50 to £150
Licence to Assign Fee £50 to £150
Lifetime Mortgage/Equity Release (dealing with) Fee £50 to £150
Merger of Titles Fee £50 to £150
Multiple Titles Fee £50 to £150
Name Declaration Fee £50 to £150
Newbuild Fee £50 to £250
Obtaining leasehold management information on leasehold sale £50 to £100
Occupier Waiver Fee £50 to £150
Power of Attorney or Court Order Fee £50 to £150
Private Mortgage Fee £50 to £150
Professional Indemnity Contribution Fee £25 - £50
Providing copies of property searches £15 to £30 (per copy)
Reconstitution of Legal Title Fee £50 to £150
Retention Fee £50 to £150
Second or Subsequent Mortgage Fee £50 to £150
Second or Subsequent Mortgage Transfer Fee £50 to £150
Service charge arrears calculation fee £25 to £50
Share Certificate Fee £50 to £150
Share of Freehold Fee £50 to £150
Shared Ownership/ Equity Fee £50 to £150
Simultaneous exchange and completion £50 to £100
Software Fee £25 to £50
Solar Panels Fee £50 to £150
Staircasing Fee £50 to £150
Stamp Duty Land Tax (SDLT) Form Fee £50 to £100
Stamp Duty Land Tax (SDLT) Staircasing Fee £50 to £150
Statutory Declaration Fee £50 to £150
Subject Access Request Fee £25 to £50
Surplus Funds Payments to a Third Party Fee £50 to £150
Third party ID checks £50 to £100
Third Party Lenders Lawyer Fee £50 to £150
Third Party Matrimonial Lawyer Fee £50 to £150
Third Party Other Lawyer Fee £50 to £150
Unregistered Title Fee £50 to £150
Unrepresented Party Fee £50 to £150
Upgrading Title to Absolute Fee £50 to £150
Voluntary First Registration Fee £50 to £150

This list is non-exhaustive and there are many more potential hidden fees.

Conveyancing disbursements

Disbursements are third party costs incurred by your solicitor on behalf of the buyer. Examples of disbursements include Stamp Duty, indemnity insurance policies and HM Land Registry fees. Disbursements should not be marked up by the solicitor and should only be recharged to you at cost.

Disbursements could add £100s and in some cases £1,000s to your moving costs.

See examples of conveyancing disbursements:

Disbursement Typical cost

Land Registry Fees – paid to HM Land Registry to register your ownership. (note that the costs are doubled if your solicitor still uses paper filing – contact the solicitor and make sure they use electronic filing)

£20 - £455

Property Fraud fee – confirms the seller’s solicitors bank details are legitimate

£12

Property searches – enquiries made of various authorities including the local authority and water company. Usually sold as a bundle.

£195 - £345

TT Fee – the cost of the electronic transfer of funds to the seller

£20 - £50

Office copies – Cost of obtaining official title documents from the land registry

£6 - £24

Bankruptcy/pre-completion searches

£20 - £40

Landlord notice fee – when buying a leasehold property the landlord will normally charge a fee for registering the new owner.

£50 - £200

Ground rent/Service charges – Service charges and ground rent are paid annually in advance. If you are buying a leasehold you will need to pay (pro-rata) for the remaining part of the year.

£0 to £1,000s

Stamp Duty Land Tax (SDLT) – Stamp Duty will be paid to HMRC on your behalf by the conveyancing solicitor on completion.

See stamp duty section

Stamp Duty Land Tax (SDLT)

In England and Northern Ireland, you have to pay Stamp Duty Land Tax (SDLT) to HMRC when you buy a house or land if it exceeds a certain threshold.

Stamp duty calculator

£

Note: SDLT is subject to special measures during the COCID-19 pandemic. See:

How much will I need to pay in 2021?

Mortgage fees

Booking fees

A payment made to some lenders in advance of your mortgage application going through. Booking fees (also known as reservation fees) may be payable if you choose not to go ahead with the mortgage.

Booking fees range from around £100 and £250 and are non-refundable.

Arrangement fees

The amount you pay to some mortgage lenders for setting up the mortgage. It may be a flat fee or may be calculated as a percentage of the loan. Some lenders allow you to add the fee to your mortgage.

Arrangement fees are usually are typically around £250 but could be up to 1% of the mortgage.

Mortgage broker fees

Mortgage brokers don’t work for free. They either charge a fee, take a commission from the lender or both. If a commission is being received from the lender, it will be built into the mortgage interest rate and you will repay it over the term of the mortgage.

Mortgage broker fees are usually around 0.4% of the mortgage. Broker fees could be around £500.

Mortgage valuation fees

Not to be confused with a Homebuyers Survey or Building Survey, you will also have to pay for a mortgage valuation survey.

This survey is to ensure that the property is worth what you are intending to pay for it and as such offers sufficient collateral for the loan. It is carried out for the mortgage lender’s benefit, not yours, but does offer some comfort that you are paying the right price for the property.

Mortgage valuation surveys cost between £200 and £600.

Survey fees

A survey is an inspection of the property you want to buy and is carried out by a qualified surveyor. A survey is essentially a brick and mortar health check which will identify any potentially costly defects. The level of detail depends on which survey

The majority of buyers arrange a survey, but it is not mandatory.

Survey costs vary: A HomeBuyer’s Report will cost between £350 and £1,000. A full building survey can cost between £500 and £1,500.

Read more:

What type of home buyers survey should I have?

If the survey identifies urgent necessary repairs, these costs must be factored in by the buyer. An adverse survey result will often prompt a price renegotiation.

Read more:

What should I do following a bad home survey report?

Removal costs

Whether you chose to rent a van yourself or use a fully inclusive removals service, the cost of moving can quickly add up.

The cost of a removals service will depend on how much ‘stuff’ you need to move and how far you need to move it.

Removals services cost from £500 - £3,000.

Packing services will add £300 - £1,000.

If you can call in a few favours from friends and do it yourself, a van could cost you between £100 and £200 for a weekend.

You will probably want to take out moving insurance also which can add £50 - £500.

Be prepared

Being prepared for the costs you will incur will help you to budget for what is almost always an expensive and stressful process. Shopping around can really pay as the range of fees being charged can be broad.

Read more:

67 money-saving tips for buying, selling and moving home

Your next step

If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.

We work with a panel of specialist conveyancing solicitors to deliver a stress-free moving experience.

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  • CQS-accredited panel solicitors
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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher