In addition to the deposit you choose to make, there are additional lump-sum costs associated with buying or selling a property. Below is a list of items, a brief description and an estimate of the amount you should be budgeting.
A government tax applicable to all property purchases over £125,000. The Solicitor will disburse this money on your behalf at the end of the transaction. The exact amount to pay will normally be confirmed on the Solicitors bill but can be calculated by referring to the following bands:
£0 to £125,000 purchase price Nil
£125,001 to £250,000 purchase price 1%
£250,001 to £500,000 purchase price 3%
£500,001 to £1,000,000 purchase price 4%
£1,000,001 and over 5%
The charges levied by a solicitor at the end of your transaction to cover their time in dealing with the purchase of your property. Some Solicitors work on an hourly rate, but most charge on a flat-fee basis. It is worth checking out whether you will be charged abortive costs should your intended purchase not proceed to completion as this could make a difference to your final bill. Some Solicitors have a policy of not charging abortive costs, others can provide an insurance policy against them (usually about £50.00). Expect to pay no more than £600 (VAT inclusive) on Remortgage and £850 on House Purchase for a flat-fee charging Solicitor with a no-abortive fee policy.
In addition to the solicitors costs you will also have the following disbursements.
A fee levied by the lender to insure themselves against the financial consequences of bad-debt should they have to repossess your house due to non-payment. Increasingly nowadays, lenders will pay this bill themselves should you be able to make a 10% deposit. If you have less than 10% the bill could be upwards of £1500. Some lenders will add this to the mortgage, others will not so it is quite an important issue. As your Financial Advisers we will make clear any such costs when we produce mortgage illustrations on your behalf.
An up-front fee which will cover (as a minimum) the valuation of your intended purchase. There are three levels of survey ranging from the basic to in-depth. The cost will vary according to the value of your new home but typical prices would be as follows:
Which survey is best for you will depend on a number of factors including your budget and the age of the property you intend to purchase, we will be happy to offer advice and guidance on this issue.
If you would like to be professionally moved then you ought to budget for between £400 and £800 depending upon the level of service you require.
Don't forget to leave some money left over to help with the furnishing and redecorating of your new home!
The charges levied by a solicitor to cover their time in dealing with the sale of your property. Please refer to previous solicitors notes in the buying a property section above.
A fee levied by Estate Agents at the end of the transaction for the work involved in selling your property.
When choosing an Estate Agent one should consider the following issues:
“I have known Paul for as long as I've been married - he first helped Jackie and I when we bought our first home in 1997 - he was exceptionally patient and explained all the in's and out's of the house buying world to us, for which I'll always be grateful. Since then he has helped us with a number of mortgages, but also has been on the end of the phone for a quick bit of advice as and when. I'd highly recommend this chap if you need any financial advice, no matter what your current status.
- Alex Matthews - Managing Director of Dynamic, JCDecaux -