You know you’ll need to save for a deposit for a first home, but how much money will you need? After all, there’s more to the process than just the cost of the deposit. Here our brokers will break down the costs you should expect to pay when moving home.
How Much House Deposit Will I Need?
Generally, the bigger the deposit you put down, the more house you can afford and the better rates you will receive. There are many mortgage options out there, some starting from as little as 5%.
If you use the average cost of a house in the UK as a basis (£225,956), this is how much of a deposit you will require for the purchase of a typical home:
5% to 10% = £11,297.80 to £22,596
10% to 15% = £22,596 to £33,893.80
25% to 40% = £56,489.80 to £90,384
How Much Does Stamp Duty Cost?
When you buy a property in England, Wales or Northern Ireland you are required by law to pay a stamp duty land tax (SDLT). Based on the fact the average property in the UK now costs £225,956, you should expect to pay £2019.10 on this. However, rates vary depending on the value of the property you’re purchasing.
Stamp duty is charged using the following brackets:
£0 to £125,000 – 0% rate SDLT
£125,001 to £250,000 – 2% rate SDLT
£250,001 to £925,000 – 5% rate SDLT
£925,001 to £1.5m – 10% rate SDLT
£1.5m+ – 12% rate SDLT
What About a Valuation Fee?
When you take out a mortgage, your lender will want assurance that the property you’re purchasing is worth the price you’re paying for it. Therefore, they will arrange for the property to be valued. This lender’s survey will cost between £150 to £1,500 depending on the size and value of the property.
How Much Does a Survey Cost?
The cost of your survey will depend on the type you opt for. The most basic is a RICS condition report which is usually associated with new or recently built homes and will cost around £250.
The next step up is a RICS HomeBuyer Report. This will cost you about £400 and will highlight any structural issues, such as damp or subsidence.
Lastly, you can opt for a Home Condition Survey or a Building Survey which will cost you £500 or more. These are the most in-depth checks you can have for a property and are recommended for older properties which may have hidden structural issues.
Do Estate Agent’s Charge Fees?
Typically, estate agents do not charge buyers any fees.
How Much Will Removals Cost?
The cost of hiring a removals firm can vary from a few hundred pounds to thousands, therefore it is hard to put an exact figure on this. The most cost-effective way to move your belongings will be to do multiple journeys in your own car, or perhaps hire a van. This will cost about £50 a day.
How Much Does Home Insurance Cost?
According to the Association of British Insurers (ABI), the average cost of home insurance in the UK is £306 a year.
Will There Be Mortgage Fees?
There are a number of costs associated with your mortgage, from the application fee to the completion fee, brokers fees to the CHAPS charge. We would recommend budgeting at least £1,000 for this.
Let’s Tot Things Up
If you’re saving for your first home, according to the above average costs, you will need savings of at least £15,000 to get on the property ladder.
Of course, this can be considerably less if the property you purchase is below the national average. However, please bear in mind this total does not include furnishing the property or any renovations, so you may choose to save more.
Need help calculating the costs or finding residential mortgages for first time buyers? Then the Ignite team can help.
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