If you are saving to buy a property and trying to figure out how much you might need, it is worth being aware of all of the other costs that you might not have factored in. We often hear people say that they are saving XXX amount for a deposit thinking that this will be enough but then there are other costs that they haven’t considered. Let’s take a look at the additional cost of buying a property in 2022 so that you can plan accordingly with no nasty surprises when you come to make your purchase.
The Costs Involved in Buying a Property
In addition to the cost of the property itself, which will be paid for with a combination of your deposit and the mortgage, there are other costs that need to be factored in. These will be more if you are buying and selling a property and include:
Buying
- Deposit
- Stamp duty if property price is £250,000 or more – 5% on everything over this
- Solicitors/ conveyancing fees
- Survey of the property
- Removal costs
Example
This is purely a guide and based on a purchase price of £300,000. Prices may vary depending on the size of the property, the condition of it and how much deposit you are putting down.
- Deposit at 10% – £30k
- Stamp duty – 5% on £50k – £2,500
- Solicitors/Conveyancing fees – average price £2,239
- Survey – Anywhere between £300 – £1,000 for a standard survey or a property in reasonable condition. For a full structural survey this can be upwards of £1,500
- Energy performance certificate – £55
- Removal costs – £500 – £1000
Total cost of moving into a £300k property can be upwards of £36k. So rather than saving £30,000, you need to be looking to save £36,000.
Buying and Selling
- Stamp duty if property price is £250,000 or more
- Solicitors conveyancing fees on the property you are selling and the one you are buying
- Survey of the property
- Energy performance certificate
- Estate agents fees on the property you are selling
- Deposit
- Removal costs
Can I Add Stamp Duty to My Mortgage?
You may be wondering if there are any costs that you can add to your mortgage such as the stamp duty. Is this an option?
Unfortunately not, stamp duty has to be paid when you purchase the property upon completion of contracts. That said, the recent government announcement means that no stamp duty is paid on a property up to the value of £250,000.
When Do These Costs Need to Be Paid?
The deposit, conveyancing fees, stamp duty etc. are all due when the contracts are completed and the money transfers take place. You may be required to pay for certain elements in advance such as the survey or an energy performance certificate for the property.
How Long Does a Mortgage Offer Last?
Let’s not forget the all-important mortgage and making sure you have this element secured. Once you have an agreement in principle, you will then be given a formal mortgage offer. This is when you know that the lender is happy to lend you the money unless there are any extreme changes in your circumstances before completion.
A mortgage offer is critical, but you need to know how long it is valid for, especially in the current climate where interest rates are rising. Generally speaking, they are valid from 3-6 months. This largely depends on the lender but once you accept the offer, the clock starts clicking until completion.
If your property purchase goes on and you are likely to miss the deadline, you may want to contact the lender and explain the situation to them to see if they will grant you an extension. The worst case is that you will have to reapply for the mortgage again.
If you want some help with making the numbers work for you, get in touch – 01934 756717.