The Hidden Costs of Buying a Home & How to Budget for Them

Buying a home is an exciting milestone, but many first-time buyers are caught off guard by the hidden costs beyond the deposit and mortgage payments

To avoid financial surprises, it’s crucial to understand these extra expenses and budget accordingly.

In this guide, we’ll break down the true cost of buying a home and offer practical budgeting tips to keep your finances on track.

1. Stamp Duty Land Tax (SDLT)

Stamp Duty is one of the biggest upfront costs when purchasing a property in England and Northern Ireland. The amount you pay depends on the property price:

First-Time Buyer Relief

If you’re a first-time buyer, you won’t pay Stamp Duty on homes up to £425,000. For properties £425,001 – £625,000, you pay 5% on the portion above £425,000.

Read more here about how stamp duty is changing in April 2025

💡 Budget Tip: Use a Stamp Duty calculator to estimate your costs before committing to a purchase.

2. Mortgage Fees

Your mortgage may come with additional costs that can add up quickly:

• Arrangement Fee: £0 – £2,500 (some lenders allow you to add this to your mortgage)
• Booking Fee: £99 – £250 (usually non-refundable)
• Valuation Fee: £150 – £1,500 (depends on property value and lender)

💡 Budget Tip: Compare mortgage deals carefully, and check if fees can be added to the loan. At Your Mortgage Shop we can help you find the best option.

3. Solicitor & Conveyancing Fees

Legal work is essential when buying a property. Solicitor and conveyancing fees will cover:

• Property searches (e.g., local authority, environmental)
• Legal paperwork & contracts
• Land Registry fees

💡 Budget Tip: Get quotes from multiple solicitors and check if they offer a fixed-fee service to avoid unexpected costs.

4. Survey Costs

A property survey is recommended to check for any issues before you buy. There are different types, including:

• Basic Valuation: £150 – £400 (often required by lenders)
• Homebuyer Report: £400 – £1,000 (assesses structural condition)
• Full Structural Survey: £600 – £1,500 (best for older properties)

💡 Budget Tip: While surveys cost money upfront, they can save you thousands in unexpected repairs later!

5. Moving Costs

Moving house isn’t cheap! The cost depends on distance, volume of belongings, and whether you hire professionals. Typical costs include:

• DIY Move: £100 – £300 (van hire & fuel)
• Professional Removals: £500 – £2,000 (varies based on distance & service level)
• Packing Materials: £50 – £200

💡 Budget Tip: Get at least three quotes from removal companies and consider moving mid-week for lower prices.

6. Home Insurance

Before exchanging contracts, your lender will require you to have buildings insurance. It’s also wise to take out contents insurance to protect your belongings.

• Buildings Insurance: £100 – £300 per year
• Contents Insurance: £50 – £200 per year

💡 Budget Tip: Compare insurance policies to find the best deal and consider bundling policies for a discount. At Your Mortgage Shop we can arrange buildings and contents insurance for you.

7. Council Tax & Utility Bills

Once you move in, you’ll need to factor in ongoing costs, such as:

• Council Tax: £1,000 – £3,000 per year (varies by property value & location)
• Energy Bills: £100 – £300 per month (depends on property size & efficiency)
• Water & Sewerage: £30 – £50 per month
• Broadband & TV: £30 – £70 per month

💡 Budget Tip: Use a budgeting app to track your monthly expenses and look for cheaper energy tariffs to save money.

8. Leasehold Costs (If Applicable)

If you’re buying a leasehold property, be aware of additional fees such as:

• Ground Rent: £50 – £500 per year
• Service Charges: £500 – £2,000 per year (varies by development)
• Lease Extension Costs: Can run into thousands of pounds if your lease is under 80 years

💡 Budget Tip: Check the lease terms carefully before buying, and factor in any potential future increases in charges.

How to Budget for Hidden Home-Buying Costs

Now that you know the extra expenses, here’s how to plan ahead:

✔ Create a savings buffer – Aim for an extra 10-15% of your property price to cover hidden costs.
✔ Get multiple quotes – Shop around for mortgage deals, solicitors, and moving services.
✔ Use mortgage calculators – Plan your repayments and ensure they fit within your budget.
✔ Speak to a mortgage broker – We can help you find the best mortgage deals and avoid costly mistakes.

Buying a home is more than just a deposit and mortgage payments—hidden costs can add up fast! Being aware of Stamp Duty, mortgage fees, legal costs, surveys, and ongoing bills ensures you’re financially prepared.

💡 Need expert guidance? At Your Mortgage Shop, our advisors can help you budget for every step of the home-buying journey and find the best mortgage deal for your needs.

📞 Call us: 0115 9620777
📩 Email us: enquiries@yourmortgageshop.co.uk
🌍 Visit us: YourMortgageShop.co.uk

Ready to buy your dream home? Let’s make it happen!