We always talk about the purchase price, but there are other costs to buying a property and of them all, stamp duty is pretty major. By knowing these costs upfront, you can budget accordingly and avoid surprises.
Stamp Duty Land Tax (SDLT) is a tax which can be paid on any property sold in England and Northern Ireland above the price of £125,000. You pay the value of the property and whether you are a first-time buyer or it is your main home or an additional property, you pay different percentages on parts of the property price, because the rates are tiered.
Other buying costs include:
Solicitor or conveyancer fees – The legal work required in moving the ownership over.
The price of surveys – These check the condition of the property, which might help you spot problems that could cost you time and money in the future. For advice from Estate Agents Hucclecote, contact www.thomasandthomasproperty.co.uk/estate-agency-hucclecote/
Lenders may also charge mortgage fees, which will bump up the overall cost. The three that are most commonly charged include arrangement fees, valuation fees and booking fees. You could pay everything at the outset or add it to your loan – but this will cost you more in the long run as interest rates apply!
Cost of packing up and moving your stuff also needs to be a consideration and you must typically have buildings insurance in place by the time you exchange contracts.
Taking into consideration these expenses would be quite helpful. As far as likely expenses go, most estate agents and mortgage advisers are able to break it down. Anticipating the situation will leave you in an ideal spot to handle your budget and gain a more seamless buying experience.
Looking beyond the purchase price
Stamp duty is the best known extra cost, but it is not the only thing buyers should research before committing. The costs of buying a house or commercial property can vary from region to region and from city to city, so understanding what applies where you are buying is the only reliable way to make sure the purchase is a sound investment.
Resale value is a good example of a cost that is easy to overlook. Many people assume that a property will at least hold its price, but values can fall over time. If you buy at what seems a good price and then have to sell for less within a short period, the loss becomes a hidden cost of the purchase.
Taking time to understand all the cost factors, from taxes and fees to the likely long-term value of the property, allows you to make an informed decision. Careful research now helps you choose a home that will remain the right choice for you and your family for many years.
Other fees to include in your budget
Stamp duty is only one of the extra costs, and a successful purchase depends on a budget that accounts for everything. Legal fees are one of the biggest. A solicitor or conveyancer will charge either a set fee or a percentage of the property’s value. Searches, carried out through your solicitor, are highly recommended because they identify problems with a property before you commit.
If the property is leasehold, expect an additional fee for dealing with the lease. Once the sale completes, the Land Registry, which holds details of registered properties in England and Wales, charges a fee to register the new owner.
Mortgages bring their own costs. Most come with arrangement fees and charges for setting up the loan. Fee free mortgages are available but usually carry higher interest rates, so compare the overall cost. Your lender will also carry out a valuation to check the property is worth what you are paying, and there may be a fee for that too.