Budgeting beyond the deposit for first-time buyers

According to a recent report from Skipton Building Society, the first step onto the property ladder is the hardest.

There’s no question that it can all seem very daunting for first-time buyers who want to purchase their first home. For those saving hard to get a deposit together, it is important to note that this is just one outlying cost of moving house.

One of the biggest additional costs to factor into a house move is stamp duty. Stamp duty is a tax paid by the buyer of a residential property.

The eagle-eyed among you may have spotted that stamp duty relief for first-time buyers will be changing after March 31, 2025. This means that the threshold at which first-time buyers pay stamp duty land tax will decrease from a property value of £425,000 to a value of £300,000. With the average house price in England being £309,000 in September 2024, it’s very likely that buyers will have to factor in increasing costs.

What other costs are associated with moving and buying a home? 

In addition to stamp duty and a deposit, other costs to consider for any house purchase include:

  • Conveyancing fees – you will need to budget for the legal process involved with buying a house, which includes legal fees, any searches carried out on the property or local area, and registration fees. According to the HomeOwners Alliance, this can cost in the region of £1,800.
  • Surveys – an important aspect of your first house purchase is considering which survey to opt for to examine the construction and condition of the building before you commit to buying. Depending on the level of survey, prices can range from around £300 for the most basic survey, to £1,500 for the most comprehensive.
  • Mortgage valuation – whichever lender you choose, they will conduct a process to determine how much they believe the property is worth, usually at a cost of roughly £300.
  • Mortgage arrangement fees – also known as a product fee, this is charged by the lender for setting up a mortgage deal or for providing access to better mortgage rates. This can be paid up front or adding to the mortgage – just beware that with this option, you will pay interest on the fee.
  • Removal fees – the all-important transportation of your worldly goods to your new home will cost anything from £450 to £1,400, according to the HomeOwners Alliance.

How can first-time buyers minimise costs when buying their first home? 

It is always advisable to shop around to get the right deal; get a few quotes from different companies to compare prices and packages. Reviews can also be a valuable tool, whether it’s a good conveyancing firm or removals company to ensure you are dealing with a reputable and proven firm.

Consulting a mortgage adviser is also an excellent way to talk not just about your mortgage, but how to truly understand all the associated costs that come with buying your first house. It can certainly be daunting if you’re a first-time buyer, but with the help of a mortgage adviser, they will be able to help you factor in those costs into the overall cost of your move, making sure it fits within your budget. Your mortgage advisers will also be able to recommend a surveyor and conveyancer.

To book your appointment with a mortgage adviser, please call 020 7317 7311 or email info@chapelgateprivatefinance.com.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.