If you are thinking about moving or buying your first home, it is clearly important to identify and understand the true costs involved. Failure to do so can lead to unanticipated expenses which could jeopardise your plans. Here at The Property Hive we have many years of experience in helping people to achieve their dream move and so have created this handy list of potential costs to help you define a realistic budget and avoid disappointment.
Please remember that not all costs will apply to everyone and many vary depending on your specific situation, therefore we can only provide an approximate idea of outlay. We are here to help, so if you would like any assistance or advise, just give us a buzz.
Deposit
The deposit required by a mortgage lender to put down in order to secure a mortgage is likely to be the biggest upfront cost of moving. You will need at least 5-30% of the purchase price. The deposit amount required by a lender will depend on your circumstances, the amount of the loan and the current economic outlook. Lenders typically expect a larger deposit when they perceive the risks of the loan are higher.
Likely Cost: 5-30% of purchase price
Applies to: Buying
Financial Advisor
If you choose to use a financial advisor to help find the best mortgage deal, then you should check their commission structure first. Some advisors will charge you a fee whereas others provide their services free of charge and earn commission from lenders. Where a fee is charged you can expect to pay anywhere from £300 upwards for their services. This is often paid directly to the advisor/broker; however, some services may be able to add this on to the cost of your mortgage.
Likely Cost: Free or £300 plus
Applies to: Buying
Mortgage Fees
There are potentially two fees linked with a mortgage product, but there are a wide range of deals available and so depending on your circumstances these may or may not apply to you.
The common fees are as follows:
- Product fee – this is the fee you pay for your mortgage product and will cost, on average, between £1,000 - £2500 depending on the size and terms of the loan. This cost can usually be added onto the amount you are borrowing.
- Booking fee – this is the cost of applying for the mortgage product you choose. This is usually paid up front, is non-refundable and is charges anywhere between £100 - £200.
Likely Cost: £1000 - £2000 (can often be added to the loan)
Applies to: Buying
Valuation Fee
Your mortgage lender will want to ensure the loan amount does not exceed the value of the property you are purchasing. In many instances you will be required to pay for a valuation to be carried out by an independent surveyor, however, some deals may include it at no cost. The average price of a valuation is approximately £250. This fee is usually added to the mortgage term.
Likely Cost: £250 (can often be added to the loan)
Applies to: Buying
Mortgage Redemption Fee
Many fixed term mortgages will have a penalty fee for early repayment of the loan. Depending on the term of the mortgage this can be anywhere from 1-5% of the outstanding loan. You should check if your current mortgage has an early redemption fee at the earliest opportunity as this could be a significant factor in your decision to move.
Likely Cost: 1-5% (of current outstanding mortgage amount)
Applies to: Selling
EPC (Energy Performance Certificate)
It is a legal requirement that every property advertised for sale has a valid EPC. This is a certificate which gives buyers an indication on the price of utility bills based on the energy efficiency of the property. The fee for an energy performance assessment can vary by area, property size, etc and can cost between £40 - £120. An EPC is valid for 10 years and so you may not be required to get a new one. The Property Hive are are able to check if your property has a valid EPC before coming on to the market.
Likely Cost: £110
Applies to: Selling
Surveys
Where a buyer feels it necessary to have a survey, basic surveys start at around £400 and more in-depth surveys can cost anything up to £1000. The cost of this is typically paid up front to the company conducting the survey. More information regarding surveys can be found here.
Likely Cost: £400-£1000
Applies to: Buying
Legal Fees (Conveyancing)
Solicitor costs are often dependent on the purchase or sale price of the property being bought or sold. The costs when buying are between £500 for smaller properties and £1500 for higher end properties. The legal costs associated with selling a property are typically slightly less. There may also be other costs involved in the legal process for buyers including fees for searches of local authority records, etc. These are often referred to as disbursements and will be paid to third parties for various services that may be necessary. The cost of these are typically in the order of hundreds of pounds. Legal fees are usually more expensive for the purchase of a property and the sale fees are typically less. Please give us a buzz if you would like us to obtain quotes for your legal fees from local solicitors here in Doncaster.
Likely Cost: Buying £850 Selling £600
Applies to: Buying & Selling
Land Registry Fee
When you purchase a property, the property will be registered in your name with the Land Registry. The average cost is between £200 - £300, paid via your solicitor.
Likely Cost: £200-£300
Applies to: Buying
Stamp Duty
Stamp duty land tax is paid on all residential properties over the purchase price of £125,000. Dependent on the value of the property, stamp duty is calculated at either 2% or 5% for properties up to a value of £925,000. This is paid direct to the government via your solicitor. Stamp duty does not apply for first time buyers, but the percentage increases for purchases of second properties. You can use the stamp duty calculator to calculate the amount of stamp duty you are likely to pay.
Likely Cost: Free for first time buyers
Applies to: Buying
Removals
If you are currently living in a property and have furniture and other items which will require transportation to your new home, you may need to budget for removals. This cost of removals can be reduced by transporting your belongings yourself. You may need to hire a van which could cost as little as £50 per day depending on the size. Should you need assistance with moving then a professional removal company can do this for you. Removal companies can provide a range of services such as packing, storage etc and so the cost will be dependent on your specific needs, the size, weight and amount of furniture and the distance between properties. Therefore, costs can range anywhere from £200 - £2000. It is recommended that you gain quotes from several removal companies early in the process.
Likely Cost: £50-£500 assuming a small amount of furniture and belongings.
Applies to: Buying and Selling
Estate Agent Fees
The cost of selling a property varies quite a bit depending on a number of variables including property value, the homeowner’s propensity for financial risk, agent performance, level/quality of service you require, etc. Cheaper online agents will typically expect to be paid regardless of a sale and may only provide an advertising service. In these circumstances you will be expected to deal with many aspects of the negotiation and the sale yourself. This is going to require you to have knowledge and experience of the legal requirements associated with residential property in England and be capable of dealing with the challenges that inevitably arise with such a complex transaction involving large sums of money, numerous involved parties and related properties in the chain.
Alternatively, you may wish to employ a professional to represent you and your best interests who has a track record in your area of achieving results and can ensure the sale concludes successfully. A good agent who is confident in achieving the best price for their clients would only expect to be paid on successful completion of a sale and not at all if they were not.
You should therefore weigh up the cost of the service against the potential risks of losing significant sums of money should you not achieve the true market value of your property or the sale falls through due to a lack of expertise or experience.
Likely Cost: give us a buzz for a free quotation
Applies to: Selling
Find out more about the buying and selling revolution, with a new innovative and more convenient way to move with The Property Hive.
The Property Hive Estate Agents in Doncaster are here to help you with free professional advice and guidance on the costs of buying or selling your home. We can also assist with obtaining quotations from trusted local companies such as solicitors and removal firms. Just give us a buzz today on 01302 247754.
