What are the Hidden Costs When Buying a New Home?

Property prices in themselves are high enough to break us out into a cold sweat. However, did you know that you can expect to pay an additional 10% on top of the total bill? Purchasing a property for £300,000? Expect to pay around £330,000 by the end of the buying process. Budgeting and preparing to stump up more cash than expected is better than falling on hard times during the buying process.

Stamp duty

First-time buyers are in luck: no stamp duty needs to be paid on the first £300,000 for properties worth up to £500,000. For everyone else who purchases a property costing £125,001 or more, you will need to pay up to 7% extra of the property cost in stamp duty.


In a nutshell, this is the legal side of buying a home. Everything from local searches to change of ownership is covered and the cost is dependent on the value of your new home, plus whether it is freehold or leasehold. Costs tend to vary between £500 to £1,500 plus £250 to £450 for disbursements.


A survey is important because it will flag any issues relating to a property’s condition. However, they are not mandatory.

A surveyor will conduct a detailed inspection of the property and this can cost from £400 to well over £1,000, depending on the type of survey you choose:

  • Condition Report – £300+
  • HomeBuyers Report (survey only) – £350+
  • HomeBuyers Report (survey & valuation) – £450+
  • Home Condition Survey – £400 to £900+
  • Building Surveys – £500+

Valuation survey

A valuation survey is produced for the mortgage lender. Unlike the survey conducted by a surveyor, the valuation survey is completed so that the mortgage lender is happy that the property is worth what they are lending you. Some lenders conduct valuation surveys for free, whilst others charge around £200.

Mortgage arrangement fees

This cost varies between mortgage providers. Some lenders will want all fees paid upfront whereas others will tab it onto the mortgage. Mortgage fees can range from a few hundred pounds to 1% of your mortgage.

Estate agent’s fees

If you are a first-time buyer you won’t need to pay estate agent’s fees as they are only applicable to a property seller. If you are selling your home as well as buying, you will need to factor in estate agent’s fees. Estate agents tend to charge a percentage fee between 0.75% and 3% plus VAT of the agreed selling price of your home.

Life insurance

Legally you don’t need life insurance to take out a mortgage against a property. However, many tend to invest in life insurance to ensure their spouse or family is financially secure if they were to pass away. Life insurance policies vary in cost depending upon your age, weight, medical history, job, the amount of cover and the terms of your policy.

Beyond the property purchase…

Once you have secured a home and come to terms with the additional expenses that aren’t always made apparent, there is further spending afoot once you begin moving in. Removals, decorating, furniture and setting up new utilities all come with their own price tag. Whilst not as expensive as the costs associated with the purchase process, make sure to keep a little money aside to cover these scenarios.

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