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Upfront costs

due before completion

Reservation Fee

A payment the customer makes to have the property taken off the market

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Reservation Fee

A payment the customer makes to have the property taken off the market

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Reservation fees are a way of homebuyers ensuring that the developer takes the property off the market while the customer progresses with the financial and legal necessities to complete the purchase. For new builds, for instance, you will most likely be required to pay a pre-contract reservation fee to the developer.

If the sale goes through the money should be deducted from the purchase price. Some or all of the fee may be used to cover administration costs if the buyer pulls out or cancels.

Reservation fees depend on the developer in question but are often in the region of £500-£1000

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Exchange Deposit

Paid via your solicitor, due when you exchange contracts

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Exchange Deposit

Paid via your solicitor, due when you exchange contracts

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On the day that you exchange contracts, you will be required to pay a deposit (traditionally this was always 10% of the purchase price, but can be as little as 5%) which is held with your solicitor until completion.

If you are buying your first home, you will need to have the deposit available in savings. If you are part of a chain and are selling a property simultaneously, it can be possible to use your buyer's deposit to fund the deposit on your new house.

A 5% deposit on a home costing £275,000 means you will need to save a deposit of £13,750 for the day of exchange

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Mortgage Deposit

Paid via your solicitor, due by the time you complete your sale

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Mortgage Deposit

Paid via your solicitor, due by the time you complete your sale

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You will need a deposit to be able to secure a mortgage, and your mortgage provider will then lend you the balance of the purchase price. Your Exchange Deposit forms part of the Mortgage Deposit, and so it is just the difference between the two amounts that you need to provide by the time you complete on your purchase.

Depending on the size of mortgage you choose to take, you may need additional savings (or money from the sale of your existing property) to contribute towards your mortgage deposit. For example, if you were taking an 85% mortgage on a home costing £275,000, then you would need to have saved a deposit of 15% or £42,250.

It's worth looking at the Government's Help to Buy Schemes which allow people to buy a home with just a 5% deposit (our Help to Buy Calculator helps you understand how much you have to save for a deposit, your interest rate and how much your monthly repayments will be).

A 15% deposit on a home costing £275,000 means you will need to have a deposit of £42,250

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Mortgage Fees

Paid to your lender when you submit an application or on completion

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18 %

of first time buyers weren't aware of, or had forgotten about, the cost of valuation and arrangement fees.

Mortgage Fees

Paid to your lender when you submit an application or on completion

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There are a wide range of fees that can be added to a mortgage. The main three costs to be aware of are:

Arrangement Fee:

While there are mortgages that have no arrangement fee, in many cases you will be expected to pay one. You can often add the arrangement fee to the mortgage loan, but in doing so, you pay interest on it for the life of the mortgage.

Arrangement fees vary significantly, and many lenders now offer rates with no fee, but the cost will typically be between £1,000 and £2,000

Application Fee:

You will need to pay an application fee when you submit your mortgage application. To secure a fixed-rate, tracker or discount mortgage, some lenders will charge you a booking fee (also known as an application fee or a reservation fee).

Budget for between £100 and £200

Property survey/report:

If you apply for a mortgage, your lender will always require a valuation of your new home so that they can establish its value. Typically, you will pay around £300, although some lenders now offer a free valuation to help reduce your upfront costs.

The valuation is carried out for the lender's benefit and is not a survey, so you may feel that it is beneficial to arrange a more detailed inspection, called a Homebuyers Survey. This may cost around £500 if it is carried out at the same time as the Valuation Report.

It is often recommended that buyers of older homes obtain a full structural survey, but this will be much more expensive and is very rarely used for brand new homes.

Budget for between £300 and £800 depending on the level of valuation or survey you need, and more if you need a full Structural Survey

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Broker Fee

Paid to the mortgage broker, usually due on completion

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Broker Fee

Paid to the mortgage broker, usually due on completion

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From the hundreds of mortgages available, a good broker will explain your options and help you find the best deal for your circumstances. Choose one who offers wide-ranging advice to help you understand your situation, rather than a broker that only deals with a smaller panel of lenders.

It is also worth noting that some broker fees are free, as they get paid by the lender.

Some brokers offer a free service, but you should budget for up to £500

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Structural Survey

(Optional)

Paid to the surveyor when you instruct them

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Structural Survey

Paid to the surveyor when you instruct them

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Many customers buying a new build property will not need an additional survey to be carried out, as they are covered by the NHBC Warranty and builder's guarantee. A full structural survey can be expensive but when buying an older home may save you money in the long run by revealing any issues or defects.

Structural surveys are usually not recommended for new builds, but budget between £500 and £750 for older properties (this can include the cost of a mortgage valuation if both are done at the same time)

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Legal Fees

Paid at various stages throughout the process and on completion

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Legal Fees

Paid at various stages throughout the process and on completion

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You'll need a solicitor or conveyancer to carry out all the legal work that's involved with buying your home. This includes dealing with the transfer of ownership, checking paperwork is in order and submitting searches to the council to check whether there are any planning or environmental issues that might affect the property's value.

Costs vary depending on the solicitor, or there are tools online which will give you a quote, based on factors such as whether you are buying and/or selling

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Buildings Insurance

Paid to the insurance company, usually required before you exchange contracts

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Buildings Insurance

Paid to the insurance company, usually required before you exchange contracts

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Your mortgage lender will require that you take out buildings insurance to protect your home against structural damage, such as from fire, floods or subsidence (unless you are buying a leasehold property, as your landlord will usually be responsible for insurance of the building - not the contents - and this will be part of your service charge). In addition, it's a good idea to take out contents insurance once you move in, so all the possessions in your home will be insured.

Buildings insurance budgets vary depending on the type of cover you require

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Land Registry Fee

Paid via your solicitor on completion

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Land Registry Fee

Paid via your solicitor on completion

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To register your new property in your name, you have to pay a fee. In England or Wales, this is handled by the Land Registry. In Scotland, it is handled by Registers of Scotland. The fee charged depends on the value of the property.

For a home worth £275,000 budget for £300

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Stamp Duty

Paid via your solicitor on completion

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Stamp duty is one of the most undervalued costs - on average, first time buyers spend
£700 more
than anticipated.

Stamp Duty

(known as Land and Buildings Transactions Tax in Scotland)

Paid via your solicitor on completion

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Stamp duty is the tax you pay to the government when you buy a property worth more than £125,000. Stamp Duty rates are paid on the property price within each tax band, and you need to pay your stamp duty to your solicitor who will then pay it to HM Revenue & Customs within 30 days of your property purchase completing.

For a home worth £275,000, budget for £3,750.

Take a look at our Stamp Duty Calculator to see how much you should save, and for those in Scotland, take a look at our guide on Land and Buildings Transaction Tax (formerly known as Stamp Duty)

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Money Transfer

Paid to your solicitor

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Money Transfer Fee

Paid to your solicitor

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This covers the cost to your mortgage provider of transferring money to your solicitor. This is often non-refundable, so if the deal does fall through at a late stage, you're unlikely to get this back.

Budget for between £25 and £50

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Removal Costs

(Optional)

Paid to a removal firm

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Removal Costs

Paid to a removal firm

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Removal costs vary depending on the amount of furniture and belongings you have, the distance between properties and whether or not professional packing is required.

Removals can start at a few hundred pounds for small local moves, but can easily cost a few thousand for moving the contents of a family home over a long distance. If you can move on a weekday, it's usually cheaper. Or you can hire a van and do it yourself.

Removal costs vary massively depending on the amount of furniture and distance of the move

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Cleaning Costs

(Optional)

Paid to a professional cleaning firm

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Cleaning Costs

Paid to a professional cleaning firm

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If you're moving out of a rental property, paying for a full end-of-tenancy clean can help ensure you get your full deposit back. Fees will vary according to the size of the property and number of bathrooms. If you plan to do it yourself, use an online checklist to make sure you don't miss anything.

Budget for between £100 and £200

Ongoing costs

you need to consider

Mortgage Repayments

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Mortgage Repayments

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Your mortgage payment is your most significant ongoing cost, so make sure it's affordable. Bear in mind that your first monthly payment is likely to be higher than your normal monthly payment. This is because you could pay interest from the day you get the mortgage, as well as for the upcoming month. Lenders always conduct a strict affordability assessment to look into your spending habits and see if you can afford the mortgage you are applying for.

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Maintenance and Repairs

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Maintenance and Repairs

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A new home will often be covered by the builders' guarantee which should provide cover for 2 years on some fixtures and fittings, while NHBC may cover structural problems for a further 8 years. With an older home, any problems that need fixing straight away should be highlighted in your survey so you can budget for them.

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White Goods and Furniture

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White Goods and Furniture

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If you're currently renting a furnished place, you'll need to get a fridge, a washing machine, an oven, a sofa and a bed as a bare minimum. New build homes often come with fitted furniture, white goods and floor finishes. With an older home, if the seller has said they will leave the white goods, make sure your solicitor has these listed in the contract.

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Running Costs

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Running Costs

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Ask the seller or sales adviser how much it is likely to cost for Council Tax and utilities (gas, electricity and water). You also need to allow for the connection charges and monthly phone, TV package and broadband costs.

If you're moving into a new build property, the developer/sales advisor should be able to tell you this information. However, it might be a good idea to ask a resident how much they pay for Council Tax and utilities, to give you an idea what to expect.

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Parking

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Parking

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Make sure you know what the parking situation is at your new home. If you don't have private parking or ample free parking space on the streets surrounding yours, you may have to pay for a parking permit to ensure your vehicle is parked close to your new home.

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Transferring Over

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Transferring Over

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There's more to the physical move than putting all of your things in a van. You need to remember that it isn't just furniture you're moving over. Have you factored in the cost of moving any pets? Or your satellite dish and equipment? These things might not be straightforward to transport.

You also need to remember you've changed address and so mail will need to be redirected. Be prepared and get a list together of every person, business or authority that you need to inform of your new address

If you have a 5% deposit, we could match it with a further 5% through our Deposit Boost offering. Still feel like buying a new home is a daunting task? Check out our guide to home buying.


Please note that all images are for illustrative purposes only.