What are First Time Buyer Costs?
Don’t let First Time buyer costs take you by surprise. The good news for First Time Buyers is that they get more assistance with fees and associated costs that any other type of buyer. Below is just an overview of the key things to consider. As ever we would strongly recommend getting independent financial advice so that you don’t have any surprises when you come to buy your first home:
Currently, there is no stamp duty to pay up to £300,000 and you ‘only’ pay 5% between £300,001 and £500,000. After that, the rates are tiered so always best to use a calculator to work out the correct amount. To work out exactly how much you can expect to pay, use this link
This is very much an area where you get what you pay for. We would always shy away from using the online sausage factor style set ups. That is a general rule but especially true of your first purchase. Good recommendations can be found by friends who purchased recently, brokers & estate agents. In London especially it is so important to get a good solicitor as each local authority works differently and you are often dealing with Leasehold properties. So please work with a firm that comes recommended! A benchmark for costs on a ‘good’ firm would be around 0.25-0.5% of the purchase price.
As the saying goes – free advice is worth every penny – As a firm, we do charge and we are unapologetic about that. Brokers are the only person in the transaction that works solely on your behalf, so as per the point on legals, you get what you pay for! Expect to pay around £500 but some firms do charge more/less than this based on your situation.
This again is where brokers add a lot of value as we can see past the window dressing of how lenders package up their products, and work out what is best value for you. Key things to think about are:
- Survey fee – often free these days but can be around 0.1% of the purchase price
- Lender fee – these range from zero to 1% of the loan. A typical fee is around £999-1999 which can be added to the loan, but again, it is worth working out what value this actually represents
- TT Fee – a fee of around £30 is charged for transferring the money to your solicitor
- Conveyancing Fee – the solicitor also works for the lender, and you are charged around £150 for the privilege
- NOTE – most lender fees can be added to the loan but be aware interest is then charged on them so only do this if you have too.
For a first move, bribing a few friends/family with Pizza and Beer is extremely effective. As is being connected to a rugby club! If that isn’t an option, get yourself on zipvan and for £10 an hour, you can do it yourself. As ever, you can spend what you want on this but there will be some cost attached to a move unless you are being very organised and getting everything new and delivered to your new pad.
Again, you can spend what you want on this. So do budget as to what you need and what you do not. Is it a raid on Ikea and then forming a callus from use of an Allen key, or home deliver from The White Company? Do you really need a 85 inch screen with accompanying sound system and the latest tech? Entirely your call, the point is cost it out. Experience would indicate that around £5,000 will get you all the basics to a good standard. But this could be considerably more or less depending on your tastes.
Also see our article How much deposit do I need as a First-time buyer.
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This firm usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
Rose Capital Partners Limited is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority.