The total cost of buying a home varies (depending on things like where you are in the UK and the size of the property) but there are some common upfront costs you’ll need to plan for.
Let’s take a closer look.
How much does buying a house cost?
1. Your deposit
This is the lump sum of money you pay towards a property upfront. You’ll then borrow the rest of the property’s total price as a mortgage.
Your deposit is easily your highest upfront cost when it comes to buying a home because you’ll need at least 5% of the purchase price saved.
With the average UK house price (as of February 2021) being £250,000, an average 5% mortgage deposit works out at £12,500.
Read more about how much deposit you need to buy a house here.
2. Mortgage costs
If you’ve got a 5% deposit saved, you’ll need to borrow 95% of the property’s price as a mortgage. There are a few different types of mortgages to choose from. Some have specific fees attached, others don’t.
If you want to save a bit upfront, you could look at fee-free mortgages - but these often come with higher interest rates, making them a little more expensive in the long run. Or, you could choose to add any fees to the overall mortgage, but this will end up costing you more as you’ll have to pay interest on them throughout the loan.
Note: Habito can help you choose the most cost-effective deal for your situation. Some brokers will charge you a one-off fee (usually £500 or so) for their services, but with us it’s totally free.
Here are the mortgage fees you’ll need to pay (if included with your mortgage deal):
- Arrangement fee: This is a fee paid to the lender for organising a mortgage. It’s usually around £999. For larger mortgages, this can stretch to £1,499–£1,999.
- Booking fee: This is paid to the lender when a mortgage application is submitted to secure the rate you want, it’s typically £100–£250. Some lenders won’t charge this and others will combine it with the arrangement fee. This fee is usually non-refundable even if you don’t go ahead with the mortgage.
- Valuation fee: Before approving a mortgage, lenders hire a surveyor to inspect the property. They want to know that it’s a sound investment to lend against - if the mortgage isn’t paid, they need to be sure that they can sell the property and get back what they lent.
This fee is paid when the mortgage application is sent. Sometimes, there’ll be an admin fee attached, covering the cost of arranging the valuation. The amount will vary depending on the price of the house - it can cost anything from £150 to £1500.
- Legal fees: You’ll need a property solicitor or a conveyancer to take care of the legal aspects of buying a house (this is called “conveyancing”). How much you pay depends on the property price and whether it’s freehold or leasehold (freehold means the seller owns the property and the land it’s built on; leasehold means they own the property, but not the land).
On average, you can pay between £1,000 and £1,500 for legal work, including property searches, and checking and exchanging contracts.
- Bank transfer fee: This is an admin fee charged by the bank when you transfer large sums of money – like between lender and solicitor, and from your solicitor to the seller’s solicitor. It’s usually £25 to £30.
3. House survey costs
When your lender sends a surveyor to inspect the house you’re buying, they just want to know how much it’s worth - a valuation survey is pretty basic. It won’t uncover any potential problems or structural issues you need to know about before you part with your cash.
That’s why you need an independent home buyer’s survey. A qualified surveyor might pinpoint property defects, giving you a chance to renegotiate with the seller and avoiding expensive repairs further down the line.
Surveys range from £400 to £600+ for a complete building survey.
Here’s everything you need to know about a home buyer’s survey.
4. Stamp Duty
Stamp Duty Land Tax (also known as SDLT or Stamp Duty) is a tax that has to be paid when buying property or land in England or Northern Ireland.
In Scotland, you pay Land and Buildings Transaction Tax (LBTT) instead of Stamp Duty, and in Wales, it’s Land Transaction Tax (LTT).
Use our Stamp Duty calculator to see how much you need to pay based on the price of the property you want to buy.
Pro tip: don’t forget removals and storage costs
When you’re working out the average cost of buying a house, remember to factor in the cost of actually moving from your old place to your new one.
Calling on friends and family and hiring a van can be a pretty inexpensive way of doing it – but if there’s a lot to shift and a long distance to travel, a professional removals company might be the way to go.
According to CompareMyMove, the average cost of moving to a 3-bedroom house 50 miles away is around £1,181 (including packing and materials, and dismantling and rebuilding furniture).
And if the move-out/move-in dates don’t quite line up, you might have to put your stuff in storage for a few days or weeks. Depending on the space needed (and where you are in the UK), a storage unit can cost from £23 to £92 a week.
Thinking of buying a home? Save with Habito Plus
Whether you’ve found a property or you’re still looking, Habito Plus can take the hassle out of buying. We sort everything - the mortgage, the legal work, and the survey – saving you time and money in the process.
There's never been an easier way to buy - check out Habito Plus.
Note: Habito Plus is only available in England and Wales right now.