In March 2021 my partner and I decided to start thinking about buying our first home. After around 15 viewings and 3 different offers later we started the formal process at the beginning of April. By the 2nd July we completed and moved in.
We now understand why people said that buying your first home is one of the most stressful things in life. There is so much much you need to do, so much information that needs to be gathered. That is all before you have even moved and the stress of paying for two houses sets in.
In this post I want to make clear what the costs involved in buying your first home are. I will use the real figures from our house purchase.
Get a good Mortgage Broker!
Having a good Mortgage Broker was key to keeping the process running smoothly. This meant that I didn’t have to worry about forgetting to do something as we were told what documents to provide, and then the broker processed all the information. The Broker too care of finding the best mortgage for us and handled the application and communications with the bank.
But it doesn’t stop there, our Mortgage Broker was also able to advise on life, contents and home insurance; the latter is a condition of the mortgage. He was able tell us which policies were best for our circumstances, as well as providing us with a great deal on our Home insurance that had an introductory offer equivalent to having 5 years no claims.
He also was able to recommend a good local solicitor (who were brilliant), and his team gave us regular weekly updates. We were also able to do a Homebuyers report as part of the bank valuation for an added fee. The costs associated with all of this are:
- Mortgage Broker fee: £495
- Homebuyers report: £275
- Life insurance: £7.52 per month
- Home & contents insurance: £21 per month
As part of the buying and conveyancing process the mortgage provider will require a number of searches to be completed on the property. These searches are also highly recommended, although not compulsory, if you are a cash buyer.
For our house we had to do searches for coal mining, environmental, drainage and water, and the local authority search. All these searches can take up to 6 weeks to come back from the time of order with the local authority search taking the longest. All of these searches when pared with the homebuyers report will give you a good indication on the condition of the property, local infrastructure, any local requirements and outline what you own and are responsible for.
Sometimes the outcome of these searches could affect the amount of money your mortgage lender is willing to give you, however, in our case everything came back fine. We bought all of these searches as a ‘search pack’ meaning we paid a single fee for all of them, which can sometimes make it cheaper. Generally, the coal search is around £40, drainage and water is around £30-£40 and the environmental report £30-£35. The local authority search is the most expensive at between £70 and £250 depending on your local authority.
Additionally, your solicitor will also do a land registry and bankruptcy search. These are to make sure the seller actually owns the property and hasn’t been declared bankrupt. Both searches cost £3 and £8 respectively.
All in all, we paid £407.80 for searches.
Solicitor / Conveyancing Fees
As buying a house is a huge legal process, you will need to pay for each step as well as for the time taken.
To start with you have you general fees which for us included an admin fee, ID verification fee and file storage fee. All of these fees will cover the cost of general admin and use of their computer servers and physical paper storage. ID verification in our case was outsourced by the solicitor to a 3rd party app, therefore we had to pay for their services. To be honest I didn’t mind this as it was all online so didn’t have to travel to their offices.
The first two big legal costs are the land registry fee and stamp duty land tax fee (SDLT). With regards to the land registry you are paying for the legal change of ownership from the seller to buyer which must be registered with land registry. So you will pay for the cost of submitting that change as well as the time taken to do it. With regards to SDLT, we were not required to pay any, however, your solicitor is still required to submit a form stating that which you will have to pay for. (I had to query this as I did not know this at the time).
The last two legal fees we had to pay were the purchase fee and acting for the lender fee. The purchase fee is generally a set percentage of the purchase price and will cover them acting for you with regards to the estate agent and seller’s solicitor. At the time time your solicitor will also be the intermediary between you and your mortgage lender. This is important as searches come back they will have to ensure the lender is aware of the content and its implications.
In total, our legal fees were:
- ID verification: £33.48
- File storage: £36
- Admin Fee: £48
- Land registry fee: £95
- STLT: £90
- Acting for lender: £150
- Purchase Fee: £600
Total legal fees: 1,052.48
The final part of buying a house is of cause moving in. The completion day when you get the keys from the estate agent is really exciting, the house is finally yours after such long process. But there are still a few things that you need to consider.
Firstly, your moving costs. You need to move all your possessions from your old house to the new one. Luckily we didn’t have to pay anything as we were able to borrow a van from work with a friend, otherwise you could pay £100s in removal costs. Second, for a time you will be paying for two homes. This includes any outstanding rent, utilities and council tax. Plus your first mortgage payment will also be more because it will include any interest accrued between your first payment date and funds release date.
How much did it cost us in total?
In total we paid £2,230.28 in the fixed costs above, plus the £28.52 a month for home, contents and life insurance. With regards to paying for two homes at the same time we estimate that this added an additional £400 to the monthly bills.
Our first mortgage payment was £947.61 whereas our regular payment will be £578.02 per month.