How Do You Establish a Budget for Buying a House?

Buying a house can come at a rather significant cost and it’s not a decision to take lightly. However, the key is to be prepared. Once you’ve worked out all the additional figures and factored them in, the entire process will seem a lot less painful.

To begin establishing your budget for buying a house, you need to consider these things:

Survey costs – you’ll need to survey the property to determine its condition. There are two types of surveys; the first is a Home Buyer’s report which will tell you the generalised condition of your property. But for a more thorough report, including structural issues, you’ll need a building survey which on average will cost between £500-£1,300 for an averaged sized home. Whilst this can seem costly, it’s important to include this in the budget for your house to make sure you don’t get any nasty surprises. 

Solicitor’s fee – You’ll need a solicitor or conveyor to carry out any legal work. It’s really important to have this done properly so that you know all of the documents, deeds and contracts are in order. On average this will be around £1500.00 to cover the sale and purchase of a property.

Removal Costs – This can vary in cost. If you don’t have a lot of stuff, you could organise this yourself or with the help of friends/family. If not, however, you might have to factor in the cost of van hire or getting a removal lorry. This cost can vary depending on the size of the van and how far away you are moving. It would be worth getting a few quotes, so you can work it into the budget for buying a house.

Buildings insurance – From the moment that the house becomes legally yours (normally by signed contract) you’ll need to have building insurance. Again, this is something that you can shop around to build into your budget, the more research you do on this, the more likely you are to get a good deal! This national average is around the £300.00 mark.

Mortgage arrangement and valuation fees – There are costs on top of securing your mortgage. Notably, arrangement fees and loan charges. It’s worth trying to source some unbiased advice about these, as they can have high rates of interest attached. Also, you will often have to cover the costs of your lender valuing the house for you, so you’ll need to add roughly £200-£600 to your budget for buying a house. The price of which will depend on how much your house is worth.

Stamp Duty – This is a tax that you’ll have to pay if your house is worth more than £125,000. Again, the amount of tax you earn is dependent on how much your house is worth. A quick google search can help you find a stamp duty calculator so you can work out exactly how much money you’ll have to pay. Should you be looking to buy a second home then higher rates apply.

Of course, you’ll also have to factor in any work you’ll need to do in the house when you move in and whether or not you need to furnish the new place. Whilst this is another thing to add to the seemingly ever-increasing budget for buying a house, we can promise that this bit is a lot more fun!