What Are the Real Costs of Buying Your First Home?
Buying your first home is often talked about in terms of the deposit alone. While the deposit is a major part of the process, it is far from the only cost first-time buyers need to plan for.
Many of the additional expenses come earlier than expected and can catch buyers off guard if they are not prepared. Understanding these costs upfront can help you budget more realistically and avoid unnecessary stress once the buying process begins.
Rather than focusing on a single headline figure, it is often more helpful to look at the full picture of what buying your first home really involves.
What Costs Do First-Time Buyers Need to Budget For?
The total cost of buying a home is made up of several separate elements. Some are paid before you exchange contracts, while others are settled closer to completion.
Common costs include:
Your deposit
Mortgage arrangement or product fees
Solicitor or conveyancing fees
Property surveys
Stamp Duty Land Tax, where applicable
Moving costs and initial setup expenses
Each of these can vary depending on the property, lender, and location.
Do First-Time Buyers Pay Stamp Duty?
Stamp Duty Land Tax is a tax paid when buying property in England and Northern Ireland. First-time buyers may benefit from relief, depending on the purchase price of the property.
Stamp Duty rules can change, and eligibility depends on your circumstances and the value of the home you are buying. Even where relief applies, it is important to check thresholds carefully so you understand whether any tax is payable.
Because this cost can be significant, it is often one of the first things buyers want clarity on when budgeting.
What Are Solicitor and Conveyancing Fees?
Conveyancing is the legal process of transferring property ownership. Solicitor or conveyancer fees usually cover:
Legal checks on the property
Local authority searches
Handling contracts and funds
Registering ownership with the Land Registry
One off Indemnity Policies where required
Fees vary depending on the complexity of the purchase and whether any issues arise during the process. Buyers should also be aware of additional costs for searches and administrative work, which are usually charged separately.
Do You Need a Survey and How Much Does It Cost?
A property survey helps identify potential structural issues or maintenance concerns before you commit to the purchase.
There are different levels of survey, ranging from basic valuations to more detailed reports. Costs increase with the level of detail, but surveys can provide valuable insight and help buyers make informed decisions about a property’s condition.
While surveys are not always mandatory, many first-time buyers choose to have one for added reassurance.
What Mortgage Fees Should You Expect?
Some mortgage products include fees such as:
Arrangement or product fees
Valuation fees
Booking fees
These costs can sometimes be added to the mortgage balance, but this may increase the overall cost of borrowing. Understanding how mortgage fees work is an important part of comparing different mortgage options.
You may find it useful to read other mortgage-related guides on the IPFA blog that explore becoming a first time buyer.
What Other Costs Are Often Overlooked?
Beyond the formal buying costs, there are practical expenses that can add up quickly, such as:
Removal services
Furniture and appliances
Initial repairs or decoration
Insurance policies required by lenders
These costs vary widely but are worth factoring into your budget early on.
Final Note
Buying your first home involves more than saving a deposit. By understanding the full range of costs involved, first-time buyers can plan more effectively and approach the process with greater confidence. Clear expectations make it easier to manage finances and reduce surprises along the way.
Frequently Asked Questions
How much extra should I budget on top of my deposit?
This varies depending on the property and location, but many buyers set aside several thousand pounds to cover fees and associated costs.
Are solicitor fees paid upfront?
Some solicitors request an initial payment for searches, with the balance due closer to completion.
Can mortgage fees be avoided?
Some mortgage products have no upfront fees, but they may come with higher interest rates. It is important to look at the overall cost.
Is a survey legally required?
No, but many buyers choose to have one to understand the condition of the property before committing.
Do costs differ for new-build properties?
Yes. New-build homes can come with different fees, incentives, and timelines that may affect overall costs.