There are lots of various costs to think about when buying your first home.
Buying your first home is such an exciting time! It can also be expensive. So, let’s look at what costs you will have as a first time buyer, and when you will need to make the payments.
Do I have to pay the estate agent?
So, you’ve found your dream home, that means you’ve likely met the estate agent. Do you have to pay them anything? NO! The seller’s pay the estate agent, you don’t have anything to pay them as the buyer(s).
Who do I have to pay and when?
There are 3 people/organisations you will be liaising with. They are:-
- Lender (or mortgage broker)
You will pay each of them in turn, as set out below.
Do I have to pay anything to my lender?
It is unlikely that you will have to pay the lender anything for taking a mortgage with them – they’re gonna get lots of interest out of you in the coming years!
Indirectly, you may have to pay them something for their valuation. See below the section on surveyors.
What will I have to pay to my solicitor?
Your conveyancer deals with the legal process. Their charges are split into 2 bits:-
- Legal fee (ie their fee for doing the work for you); and
- Disbursements (payments to third parties on your behalf
You will also pay the deposit via your solicitor who will pass it on to the sellers solicitor. This is typically 10% of the purchase price. It needs to be paid on exchange of contracts.
Your conveyancers professional fees will vary, so do shop around and beware hidden costs! You will generally pay anything between £850-£1,500 (+VAT). So in the region of £1,000 to £1,800 inc VAT. This is generally paid on completion.
Some of the disbursements are typically paid upfront when you instruct your solicitor. They will include:-
- Search fees – these will be in the region of £350 and need to be paid upfront
- Stamp Duty (SDLT) – depends on value of the property. See our Guide to SDLT for first time buyers. SDLT is paid on completion
- H M Land Registry fee (to have you registered as the new owner(s) – paid on completion. See HMLR fee scale.
SUMMARY OF FEES FOR FIRST TIME BUYERS
||At time of survey
||Their professional fee
||10% of purchase price
||HM Land Registry fee
The balance of the purchase price (ie less the deposit paid on exchange of contracts) will typically be met by your mortgage (and/or savings).
How much does a survey cost?
A full survey is likely to cost anything from £600 (£500 +VAT) upwards depending on the type of property.
You do not have to have a full survey, but we would recommend you do. A survey is designed to help you understand what you are buying in terms of the bricks and mortar.
Your lender will insist on you getting at least a valuation (for them) so that they are confident that the house is worth what it being sold for. Most lenders tend to meet the cost of this valuation to tempt customers in. This is NOT the same as a full survey.
You can get a less detailed (and cheaper) report (one down from a full survey) which will be less expensive.
How much is Stamp Duty (SDLT) for first time buyers?
There is a first time buyer relief in place at the moment. As at 2023 are
||First Time Buyer SDLT
|Up to £425k
|£425k – £625k
How much are Land Registry fees for first time buyers?
This is paid at the end of the conveyancing process to have you registered as the new owner(s). The current fee scale is:
|0 – £80k
|£80k – £100k
|£100k – £200k
|£200k – £500k
|£500k – £1mil
Are there any other costs for a first time buyer?
If you are using a removals company, then obviously you will need to arrange and pay for this. The price will be dependent on who you use and how much stuff you are moving. Invariably, first time buyers will do the moving themselves, perhaps with a hire van!
You will need to insure the property once exchange of contracts has taken place.
And, if you want to start making improvements after you move in (kitchens/bathrooms etc), this will obviously create a cost too!
How do I qualify to be a first time buyer?
This relates to the SDLT relief – which of course can make a big difference if you would otherwise fall to paying SDLT. The HMRC consider someone to be a first time buyer when they have not previously owned a residential property either in the UK, or abroad. If you are buying jointly, and one of you has been a homeowner before, then the relief is not available and full SDLT rates will apply.
First Time Buyer Solicitors
What is it they say are the 3 biggest stress sources in life: moving home; relationship breakups; and bereavement?! So, if you are set to be buying your first home, choosing the right conveyancing solicitor is the start of keeping that stress to a minimum. Transparency is everything, and that’s where QLAW wins. Our industry leading APP gives you 24/7 access to your file, so you will always know what is going on. And on that note, whilst you may think it is more convenient to use a ‘conveyancer near me’, its no good having a solicitor physically where you work or live when they are only open Mon-Fri 9-5! We do everything online – including your ID which is the same biometric tech used by modern internet banks. We’re the ultimate in convenience – and we reckon that makes us the number 1 choice for first time buyers!