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The hidden costs of buying and owning a house

Jul 23, 2021 - Buying

Buying a home can be a lot more expensive than you may think, and there are usually hidden costs that can end up adding more than 10% to your total property bill. The costs that come with owning and running a house can often surprise former renters, meaning their budgets don’t quite match their financial needs…

If you don’t prepare for these hidden costs, you may find yourself in financial hardship for the first few years as property owners, so make sure you take them all into consideration:

Stamp Duty

Depending on the price of your property, stamp duty can end up adding thousands of pounds to the overall costs involved in buying a house, and this needs to be paid up front. There are different brackets for stamp duty, and it will change depending on if you’re a first-time buyer or not. Ensure to check with an online calculator or your estate agent exactly how much you’ll end up paying, so you don’t have a nasty surprise.

Surveys and Valuations

These are a necessity when buying a house, but can completely vary in price, ranging from just a couple of hundred pounds, up to more than a thousand pounds. This will depend on the value of your property, how old it is, and what type of survey you decide to have. A higher priced survey can be cost effective if it raises expensive problems with the home.

Mortgage Fees

Applying for a mortgage can be one of the trickiest parts of buying a house. There are lots of different processes involved, and with them come lots of different fees. Most mortgages will charge an arrangement fee, they may also charge an indemnity fee, and if you use a broker, you will probably have to pay them a fee as well.

Removal Company

Once you have bought a house and have a completion date, you need to think about moving all your belongings in. The easiest way to do this is by hiring a removals company. Depending on how many things you have and how big your house is, this can cost anywhere from around £350 to many thousands of pounds. Of course, you can do this job yourself, but unless you can fit all your belongings in your car, you’ll end up shelling out for a van rental.

Renovations

Some new homes will need work doing to them, but some homeowners just like to change things up in order to make their mark on their new house. The majority of places will need at least some decoration, and some may also need a few repairs doing. This can all add up, and how much you spend will completely depend on what you want to do.

Council Tax

When a property is occupied, the residents will need to pay council tax – again this completely varies, depending on where you live and how big your house is. Small properties in low-cost local authorities will only have to pay around £100 in council tax, but bigger houses in expensive councils will find themselves having to pay quite a bit more. If you were previously a tenant in a house with multiple other tenants, this may be a shock as it’s usually the landlord who pays the council tax in that situation.

Insurance

Building and contents insurance can cost anywhere between a couple of hundred pounds and thousands of pounds a year, depending on a range of factors. These include what exactly you decide to insure, how much your home and belongings are worth, when your property was built, how secure your home is, and how much parts would cost to rebuild.

Don’t be caught out by small hidden costs that come with buying your new home. Make sure to consider everything and ask a current homeowner or your agent if there’s anything you might have missed.