The true cost of home-buying

Buying a home is more than shelling out for simply bricks and mortar. There are associated legal, administration and government fees to pay, as well as small things you may not have considered.

In fact, the average cost of moving home in the UK went up by £870 (9%) in the past year to almost £11,000 – in London it increased by £4,732, more than five times the national increase.

Budgeting for all the costs (big and small) at the start helps you work out what you can afford, before you make an offer on your dream home.

Hidden costs when you buy your home

Stamp duty – a government tax on homes that cost £125,000 or more. In 2016 average stamp duty costs increased by £372 (17%) to £2,504 from the previous year.

Valuation fee - Some lenders may provide it free as part of the mortgage offer, but surveys and valuations can vary from a few hundred pounds to a four-figure sum, depending on the value of the property.

Legal fees – Getting a solicitor to do the conveyancing – the legal work such as local searches, Land Registry and other documentation – can range from £800 to £1500 with some offering a flat fee. There is also a fee for the electronic transfer of the mortgage money from the lender to the solicitor.

Hidden costs after you buy your home

Removal costs – Moving all your items to your new home is a one-off cost you may not have thought about. Expect to pay around £50-60 an hour for hiring two movers, and a van for a move locally.

Service charges – This is a monthly charge (usually around £100), that’s common in apartment blocks, for maintenance of the communal areas (lifts, gardens, stairs etc.). There may also be a charge of £50-100 a year for ground rent for leasehold properties.

Home insurance - If you lived with your parents before buying, you may never have had to think about insuring your contents before, and those who rented probably wouldn’t have had to pay buildings insurance. Look for the right deals and make sure you’re covered.

Changing utilities - For some people it may be the first time they are responsible for utility bills, such as gas, electricity or water. The average monthly utility bill cost for a 1-2 bedroom flat is £37.92. Now may be a good time to compare deals to make sure you’ve got one that suits you.

Furnishing/decorating - Arguably the biggest hidden cost of all is that of making the new house into your home – by renovating, decorating and buying new furnishings. To help with spreading the cost of turning your house into a home, 0% purchase cards could help give you more time to pay it off and make flexible monthly payments without having to pay interest on the balance for the promotional period, as long as you make the minimum monthly payment. While balance transfer offers can help you move credit card debt to another card with a lower rate or no rate at all, typically for a small transfer fee. Find out about the different types of credit cards and loans to help pick the right one for you.

Mail redirection – When you move home, it’s a good idea to get your mail redirected so that it doesn’t end up in the hands of people you don’t know. You can set up mail redirection through Royal Mail for 3, 6 or 12 months from £31.99.

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Now Experian can help you find credit cards and personal loans you’re more likely to be accepted for, and it won’t negatively impact your credit rating. We are a credit broker not a lender, working with selected lenders. †

Experian CreditMatcher is a free independent service that helps you compare credit deals, based on your credit information, and gives you your Experian Credit Score FREE forever.

Remember though that if you are accepted, the interest rate or promotional deal you get from lenders may be different to the one advertised.

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