How to save on the extra costs of buying a home
When you’re looking to buy your first home, you know you’ll most likely need to save for a mortgage deposit, but there’s more to buying a home than you might have realised.
Buying a home has a few extra costs to it that you should be ready to tackle before you start your homebuying journey. In this article, we outline some of the costs to budget for, as well as how you can save on your deposit!
What are the additional costs of buying a home?
Whether you’re just at the start of the homebuying process or you’re almost ready to make an offer on a property, you’re likely to have some money put aside to cover your deposit.
But there are other costs that you need to budget for.
Here’s some of the things that you may need to pay for on top of your deposit and a few ways to save yourself some money.
1. Mortgage adviser costs
A mortgage adviser can help you get the right deal for you, saving you a lot of money in the long run. They can also apply for the mortgage on your behalf and will be able to tell you exactly what paperwork you need to get together.
Before you choose a mortgage adviser, check how much they charge.
Some don’t cost you anything as they’re paid by the mortgage provider they recommend. If they’re not charging you, ask them if they’re independent – some will be more likely to recommend a particular mortgage provider, especially if they work for this provider, and this could mean you miss out on a better deal.
How you can save money when you hire an adviser
Ask friends and family if they’d recommend the mortgage adviser they used. You can get a discount on fees by being referred by a previous client.
2. Solicitor fees
When you’re ready to make an offer on your first home, you’ll need to hire a solicitor who specialises in conveyancing, known as a conveyancer or conveyancing solicitor. This person is legally qualified to do all the paperwork involved in changing the ownership of a home so this is an essential cost. They’ll also handle the searches and checks that your mortgage provider will ask for, as well as make any other necessary payments to third parties on your behalf. They’ll then add the cost of these searches and other payments, called disbursements, to your final bill.
On average, you’ll be paying anywhere between £575 and £2,100 to cover a solicitor’s legal fees. The searches involved in a standard purchase are likely to cost around £290 and disbursements can add up to £700 or more to the final cost.
How to save money on solicitor fees
Shop around! Like most things in life, it’s worth looking around for good deals as solicitors don’t all charge the same rate. There is an argument that you get what you pay for, so it could be worth again speaking to friends and family for recommendations.
If you live in a relatively expensive area, like London, look for a conveyancer slightly out of your area as they’re likely to be cheaper. The solicitor doesn’t need to be based in the area you’re buying in, although it can be helpful if they are nearby to make it easier to drop off paperwork and pick up the keys on completion day.
You could look for a “no sale, no fee” conveyancer. You’ll still need to pay a deposit when you ask the solicitor to represent you (usually 10% of their fee), but if the sale falls through you won’t need to pay the full fee.
You can also hire an online-only conveyancer. These tend to be cheaper and they’re also more likely to offer no sale, no fee services.
3. Surveys
Your mortgage provider will carry out a survey before formally offering you a mortgage. However, this tends to be fairly basic. They’re looking to find out if the property you want to buy is worth the money you want them to lend you, so if you can’t pay your mortgage and they need to repossess your home they know they can sell it and get their money back.
You also are unlikely to be sent a copy of this survey.
Many people choose to carry out their own survey to find out about things that could go wrong, such as any damp in the property, which can be an expensive problem. Doing so could save you a lot of money in the future.
There are a few kinds of surveys that you can get.
| Type of survey | What it includes | How much it costs |
|---|---|---|
| RICS Home Survey Level 1 | A general idea of the condition of the property, without any advice or valuation. | Between £290 and £560 |
| RICS Home Survey Level 2 or RPSA Home Condition Survey | General condition of the property, advice on how much repairs could cost and how much maintenance you might have to do in the future.
Can include a valuation of the property for an extra fee. |
Between £325 and £900, with an extra £50 on average for a valuation. |
| RICS Home Survey Level 3 or RPSA Building Survey | All of the above, as well as any risks or hidden defects in the property, what kind of remedial work you’ll need to do and how long that work might take to complete.
Usually recommended for older properties or properties in poor condition. |
Between £630 and £1,200 |
It’s best to carry out a survey as soon as possible. If it uncovers issues that would be too expensive to fix, you’d still have time to pull out of the sale.
4. Stamp duty
As a first-time buyer, you’ll only have to pay stamp duty if the property you’re buying costs more than £425,000, so most readers can ignore this section!
If you are paying more than this for your first home, you’ll need to pay 5% of the value above £425,000.
So, if your property costs £426,000, then you’ll pay 5% of £1,000, which is £50. If it costs £500,000 then you’re £75,000 above the threshold and will pay 5% of £75,000, which is £3,750.
5. Moving costs
If you’ve rented before, you probably know how expensive it can be to move house! This is especially true if you’ve been settled somewhere for a while and own your own furniture, on top of all your personal items.
The costs of hiring a moving van vary, depending on the size of the property you’re moving out of and how far away the two properties are from each other, for example if you’re moving to a different town.
Some movers can charge more depending on how big a van you’ll need to book, while some charge you according to on how many movers per hour you’ll have to hire. You may also have to pay separately for large furniture items such as a sofa or a bed.
On average, moving from a two-bedroom apartment to a property in the same town can cost you around £300 to £500.
How you can save on moving costs
There’s many ways to save on moving costs, but the first one is to shop around and compare quotes. Man and van services tend to be a bit cheaper than more comprehensive removal services.
Pack up everything you can yourself, as some movers can offer to pack for you but will charge you for the service. Having everything packed in advance will also help you get more accurate quotes and give you a better idea of how big of a van you’ll need.
You can also rally friends and family to help you move your belongings to your new home. You can make it easier for them by covering any parking fees and petrol costs, and you can show your appreciation by buying them dinner and drinks. You could also hire a van for the day and drive it yourself and just ask friends and family to help you load and unload it.
You can even invite people over to help you organise once everything’s been moved in, just offer to feed them! That way not only will the moving process feel much less stressful, but you’ll be spending quality time with friends and family.
6. Furnishing and decorating your new home
Even if you already own a lot of furniture, it’s likely you’ll end up having to spend some money to make your new house truly feel like home. This is especially true if you’re moving to a bigger property, where you might even have extra rooms that you have no furniture for.
You also might want to make some bigger changes, like change up the colour of the walls and woodwork.
How you can save on furnishing and decorating your new home
This is one of the easiest areas to save on and costs can be spread over time as long as you have the essentials when you move in.
You can find second-hand furniture online on sites like Gumtree and Facebook Marketplace and shop in-person for bargains at charity shops and car boot sales. If you’re lucky, you might even find good quality items available for free on apps like Olio and Freecycle!
You can then give those second-hand items, as well as anything you already own, a brand new look by getting your hands dirty with some DIY. There’s a lot of information out there on how to upcycle pretty much anything, so put together an inspiration board and open up YouTube for some guidance.
As long as you’re not making structural changes, it’s worth considering decorating your home yourself. This is cheap to do and goes a long way to changing the look and feel of your home.
What about saving for my mortgage deposit?
Saving up for a mortgage deposit can be the hardest part of buying a home. It can feel like every penny is going into your deposit fund. But there are ways you can hit your goal faster with some help from the government.
Lifetime ISAs are savings or investment accounts designed to help you save for your first home faster. You can put up to £4,000 in each tax year and the government gives you a 25% top-up on everything you put in. If you max out your yearly allowance, that’s an extra £1,000 for your house deposit each tax year!
The catch is that you have to use your lifetime ISA to buy your first home or wait until you’re 60 to take your money out. If you use that money for anything else before you turn 60, you’ll have to pay a 25% penalty fee on everything you take out, which is more than the government put in in the first place.
If you’re set on becoming a homeowner, then a lifetime ISA might be right for you, but if you’re still undecided, putting your money in an ISA for now could be a good idea - you can always move it into a lifetime ISA later.
Most importantly: get started
Got £25 in your current account? If you put it in a lifetime ISA now you'll be taking your first big step towards owning your own home. OneFamily's Lifetime ISA is a stocks and shares product, which means your money is invested in the stock market. While there is good potential for it to therefore grow in the long-term, there is a risk you could lose money.
Not yet sure if now’s the time? Sign up to receive our lifetime ISA guide by email using the form on this page to find out more about this savings shortcut.
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