In this brief guide, we are going to discuss how much is it to buy a house in the UK.
To buy a house there are various costs involved, they included. You can break this down into the upfront costs of buying a house in the UK, the ongoing costs of owning a house in the UK and the costs of moving from one house to another in the UK.
The upfront costs of buying a house in the UK
|Mortgage deposit||5% minimum|
|Mortgage brooking fee||£50 to £250|
|Mortgage broker fee||£250 to £1000|
|Mortgage arrangement fee||£100 to £2500|
|Stamp duty||dependant on property price|
|Conveyancer or solicitor fee||£1000 to £2500|
|Home valuation fee||£50 to £250|
|Surveyor fee||dependant on property price|
|Estate agents fee||dependant on property price|
|Electronic transfer fee||£25 to £50|
|Removal costs||£100 to £600|
|Land registry fee||£90 to £140|
If you are buying a house with cash then you won’t have to worry about the mortgage fees or conveyancing fees as you can do without those.
The ongoing costs of owning a house in the UK
Gas and electric costs
Monthly mortgage repayments
The costs of moving houses in the UK
Home removal insurance
Redirecting your mail
Buying a house in the UK is hands down one of the most expensive things you will do. There is a host off fees involved and you should take all of them into account when budgeting to avoid getting surprised on closing day or at the real estate manager’s office.
The upfront costs of buying a house in the UK💲💲
Your Mortgage deposit✔
Your mortgage deposit is the main cost you will need to cough up when buying a UK home.
Mortgage lenders will usually require you put down 5% to 20% of the property price as a mortgage deposit before they lend you the remaining bit.
Typically, mortgage lenders may prefer to see at least 15%down as a mortgage deposit but there are some lenders who will allow you to only put down as little as 5% for your mortgage deposit.
You can apply for a home buyer government scheme if you are eligible and this should reduce the amount of initial deposit you are required to put down or increase your mortgage deposit savings.
Some of the government schemes which may be able to help you increase your mortgage deposit include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
A bigger mortgage deposit will mean mortgage lenders are more willing to offer you a cheaper mortgage rate as your mortgage loan to value has fallen.
Your mortgage deposit will also be dependent on the type of mortgage you take out and the type of borrower you are.
If you have bad credit or are a self-employed borrower then you can expect the minimum mortgage deposit requirement to be much higher.
When considering how much it is to buy a house in the UK, your mortgage deposit will certainly be one of the biggest costs.
Mortgage booking fee✔
A mortgage booking fee is essentially a mortgage application fee. This fee is paid to process your mortgage.
The mortgage booking fee can range between £50 to £250 depending on the lender. When considering how much it is to buy a house, the mortgage booking fee may seem little but once all the costs are added up you realise how huge the total cost is.
You might be thinking “It is important to inquire about these costs in advance” as they may sway your decision on which mortgage lender to consider.
Luckily you can easily compare the total cost of getting a mortgage through the APRC as it will include all extra costs.
It may be better to pay this fee upfront as if you add them to your mortgage you will be paying interest on them over the life term of your mortgage except you overpay your mortgage in the first month by the exact amount.
Mortgage broker fee✔
Mortgage brokers usually charge a fee for sourcing a mortgage and assisting you in getting approved for a mortgage.
This can range from £250 to up to £1000 depending on the size of the mortgage.
Some mortgage brokers will simply charge you a percentage of the mortgage.
Things have changed over the past 24 months and most mortgage brokers are no longer charging a fee but rather processing the mortgage for free.
When considering what the costs of buying a house, the fees for a mortgage broker could be significant.
Mortgage arrangement fee✔
The mortgage arrangement fee is very similar to the mortgage booking fee.
The mortgage arrangement fee is a fee you pay to the mortgage lender to set up the mortgage.
This fee can go from £100 all the way to £2500 depending on the size of your mortgage.
It is better to pay this fee upfront as if you add your mortgage arrangement fee to your mortgage you will be paying interest on it over the life term of your mortgage except you overpay your mortgage in the first few months by the exact amount.
When considering the costs of buying a house, picking a mortgage lender with a mortgage arrangement fee which isn’t too high may be one of the things you want to do.
You should compare the full cost of a mortgage by using the APRC.
Stamp duty has changed over the past few months first time buyers now pay a discounted stamp duty in comparison to the rest of the market.
Stamp duty is a government tax paid on homes over a certain price threshold.
In Wales, it is referred to as the land transaction tax and in Scotland the land and buildings transaction tax.
The stamp duty table
|Property value||Stamp duty rate|
|Up to £125,000||0%|
|£125,001 to £250,000||2%|
|£250,001 to £925,000||5%|
|£925,001 to £1.5 million||10%|
|Anything above £1.5 million||12%|
Stamp duty table for first-time buyers
|Property value||Stamp duty rate|
|Up to £300,000||0%|
|£300,001 to £500,000||5%|
If you are a first-time buyer buying a property below £500,000 then you will be eligible for first-time buyer stamp duty relief.
This means you pay 0% on the first £300,000 and 5% on anything above £300,000 to £500,000.
Stamp duty on second homes
|Property value||Stamp duty rate on a second home|
|Up to £125,000||3%|
|£125,001 to £250,000||5%|
|£250,001 to £925,000||8%|
|£925,001 to £1.5 million||13%|
|Anything above £1.5 million||15%|
If you are buying a second home and currently own a property(whichyou are keeping) then you will pay stamp duty at the additional rate of 3%.
When thinking about how much it is to buy a house, the stamp duty costs will likely be your biggest costs or second-biggest costs after your mortgage deposit.
Conveyancer or solicitor fees✔
A conveyancer or solicitor will help you carry out any legal paperwork involved between yourself the mortgage lender and the property owner.
They will also carry out searches on the property, its title and any legal structure they feel will be relevant to the sale.
Conveyancers or solicitor fees can range from £1000 to £2500 depending on the complexity of the case.
This can prove to be a huge cost when buying a house and will usually depend on the price of the property.
Mortgage valuation Fee✔
Mortgage lenders will carry out a valuation on the house you want to buy to determine what its value is and how this affects the mortgage you are taking out and your mortgage deposit.
This helps them work out your Mortgage LTV to determine what APR to charge you.
The mortgage valuation fee can be between £50 to £250 dependant on mortgage lender.
It is one of the minor costs associated with buying a house
Some mortgage lenders do not charge a mortgage valuation fee.
You should not rely on the survey report gained from a mortgage valuation as it will not be a thorough inspection which will reveal any defects.
You should instead carry out your own survey.
Property Surveyor fee✔
A property survey is a good idea. In fact, it’s a great idea as it lets you know if there are any structural defects on the property you want to buy or a more annoying issue such as Japanese knotweed.
Property surveys may cost up to £800 but any more than this might not represent good value for money.
You should always compare costs from different providers.
Property surveys are not a requirement from most mortgage lenders except your home has historic issues with damp, Japanese knotweed etc
This means when considering the costs of buying a house, this is one of the costs that could apply to you or not.
Estate agents fees✔
Estate agent fees are the fees the seller pays when they sell their home through an estate agent.
This could range from 3-6% of the eventual sale price. Of recent more online property sales platforms such as purple bricks and Emoov have come into the market with fixed fees for property sales.
You can even find some firms offering this for as low as £99 . Ensure you do your homework before you chose an estate agent.
This cost will usually only apply to you if you are selling your old house as part of a home buying process.
Electronic transfer fee✔
The electronic transfer fee ranges between £25 and £50. It is the cost for the mortgage lender to transfer the mortgage funds to the solicitor.
It is one of the very minor costs of buying a house.
Removal costs can start from £100 up to £600. You can save this money by doing it yourself or with the help of some excited friends and family.
Land registry fee
When you register a proeprty as a new owner you will have topay the land registry fee.
The land registry is a government department which holds data on all registered property owners in the England and Wales.
The land registry fee is not a significant cost of buying a house- it can range between £90 and £140 depending on the property price.
Your ongoing costs for homeownership
Once you have bought your new home there are some costs which you will have to pay for on a monthly or annual basis.
Home insurance isn’t a legal requirement but if anything happens to your house such as theft, structural damage or loss of property then you will be out of pocket.
Most mortgage lenders will require you have buildings insurance to protect your home from fire, floods and structural damage as a condition to the mortgage they give you.
You might also want to get contents insurance which will insure the contents in your home but some high-value items over a certain price(replacement value ) will require you to get separate insurance for them.
You may also want to get life insurance which covers the full cost of your mortgage in case you die before you finish paying off your mortgage.
This will allow your family not to bear the burden of paying off the mortgage.
Council tax is a tax you pay on property you own in the UK. The tax you pay will be based on where your property is located and which tax band your property falls into.
This is the same for much of the UK aside from Northern Ireland where things are a little bit more different.
Gas and electric costs✔
Gas and electric costs, as well as other utility costs such as broadband, are costs you might not be able to avoid.
The costs of gas and electric will vary from provider to provider and this is exactly why you should sign up to an auto-switching service to ensure you are always on the best gas and electric deal.
Maintenance costs might sound a bit vague but after 1 year the average new homeowner is spending upwards of £4000 on maintenance.
This could be broken doorknobs, light switches or boiler repairs.
Ensure you have some savings and emergency fund put away to cover these costs of home ownership.
It’s just good financial wellbeing!
Leasehold is when you own the home for a limited period of time. This is usually more than 99 years.
Leaseholders have to pay a variety of fees including most notably ground rent.
This should cost between £100 to £500.
Monthly mortgage repayments
When trying to determine how much it is to buy a house the monthly mortgage repayments will play a big factor if you are using a mortgage to buy your house.
The type of mortgage you get( interest-only vs repayment), your mortgage term, your credit score, the size of your mortgage and the size of your mortgage deposit will determine how big or small your monthly mortgage repayments will be.
Interest-only mortgages have smaller monthly mortgage repayments in comparison to a similar-sized and similar term capital repayment mortgage but you will need a capital repayment vehicle.
With a capital repayment mortgage, the monthly mortgage repayments are bigger than those of a similar interest-only mortgage but at the end of the mortgage term, you will own the house in full and have no outstanding mortgage balance.
Home mover costs
When buying a home some of the costs you may have to face include home moving costs from your previous house.
House removal insurance✔
When moving homes it is essential your items are insured so you don’t lose them in transit through damage or theft.
You should first check if the home removing agent is insured and how this insurance covers your property.
If their insurance isn’t sufficient then you should check if your home insurance caters for this.
If your home insurance doesn’t cater to this then you should start shopping for home movers insurance.
When looking for removal companies be sure to compare quotes and search with the British association of removers for insured removers.
When leaving your old home you will want to ensure it is clean and tidy enough so prospective buyers will be more interested in it.
If your old home is rented then you may contractually have to clean it when moving out or face charges from your landlord.
You can employ a cleaning agency or do the cleaning yourself.
The quotes for this will range based on the size of your house and the complexity of the work.
When moving to your new home there may be some items you have fallen out of love with and want to sell.
You will have to put this in a storage unit if your new home is too far or doesn’t have space.
You can check with the different providers for their pricing and compare accordingly.
Redirecting your mail✔
You can also set up a mail redirection service through royal mail for your old post to get delivered to your new house. Updated prices can be seen on the royal mail website.
Calculators to determine how much it is to buy a house
Below we have compiled some calculators which you may find useful when trying to determine how much it is to buy a house in the UK.
Stamp duty calculator
You can use our stamp duty calculator to determine how much stamp duty will affect the cost of buying a house.
House price forecast calculator
You can use the house price forecast calculator to determine what house prices could look like in the future. This calculator is for guidance only.
Cost of moving house calculator
You could use the cost of moving house calculator to work out what the cost of moving house could be.
You can use the mortgage calculator to determine what your monthly mortgage repayments could look like. This is for guidance only.
Use a mortgage broker to buy a house
You may want to consider using an independent mortgage broker to get a mortgage.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application.
This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.
FAQs: how much is it to buy a house in the UK
How much money should you have saved to buy a house?
The amount of money you should have saved to buy a house will depend on the price of the house you are looking to buy. You will usually need funds to cover the mortgage deposit and all associated costs such as stamp duty.
How much money do you need to buy a house UK?
To buy a house in the UK you will need at least a 5% mortgage deposit. This means for a £500,000 house you will need at least £25,000. You will then need to pay for other costs such as stamp duty and mortgage fees.
In this brief guide, we discussed how much is it to buy a house in the UK.
If you have any questions or comments please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.