There is a vast difference between the asking price of a property and how much a buyer will end up paying out when all costs are taken into account.
New research by TotallyMoney has uncovered the true costs involved in buying a property, revealing the average price people pay upfront is £38,777.
Across the country this figure can vary according to the location. In London buyers can fork out as much as £125,195 in upfront cost compared to just £24,895 in Bradford.
Now TotallyMoney is warning people not to underestimate just how much money goes into getting onto the property ladder. From deposits, mortgage payments and estate agent fees to less obvious costs such as house surveys, packing materials or fixing cracks – there is a lot to consider.
Indeed, just these seemingly minor outlays can add up to nearly £1,500 and with other fees could represent 40% of the upfront cost, it said.
Joe Gardiner, head of brand and communications at TotallyMoney, said: “Buying your first home is an exciting step in your life, but it’s also an expensive one – and often more expensive than you initially estimate.
“We conducted research to help first-time buyers make sure they are aware of all potential costs before they have to pay them.”
Here TotallyMoney outlines some of things buyers may want to consider when preparing their finances in advance of their first home purchase.
Unforeseen Circumstances
Some costs, though unexpected, won’t put too much of a strain on your wallet. Others, on the other hand, can be a nasty surprise. Have you considered:
- Stamp duty land tax – Stamp duty isn’t a problem for everyone – homes under £125,000 won’t incur it, and prices up to £500,000 for first-time buyers will be reduced or negated. But if you’re buying a more expensive home, or it is not your first, it can cost tens of thousands of pounds.
- Fixing leaks, cracks, and rewiring electrics – Small faults with a property are easy to overlook when you’re buying it. But once you’re in, it’s natural to want to bring the place up to scratch. The problem is, with average costs of £120 and £60 for leaks and cracks respectively, and as much as £2,750 for rewiring electrics, it can be a real shock.
- Homebuyer’s Report – Even if you don’t want a full building survey, a homebuyer’s report can identify a lot of potential issues with a property – but it’ll still put you out a massive £786 on average.
- Solicitor Costs – The cost of a solicitor can reach between £850 and £1500, which is a sizeable fee to pay as you enter your new property.
October Sales – When To Buy
The research also discovered the best time of year to buy your property. In general, property costs increase throughout the year, meaning it’s better to buy sooner rather than later.
This is particularly true at the start of the year, as prices increase dramatically each month from April through to August, with the average increase in April being about £2,380.
But if you’re looking to buy in August, you might be better off waiting until October. On average, property prices drop by about £80 in September, and then a further £240 in October.
It’s not a significant change when compared with the hundreds of thousands that go into a property, but it can offset some of the costs of moving in and setting up.
Where To Buy Cheap
You might not be able to save much on the costs of the property itself, but you can always make sure you’re buying in the cheapest locations available.
Bradford – Bradford boasts the cheapest average property prices across the country at an average of £135,489, and the upfront costs come in at only £24,895 if you need every option.
Sunderland – Sunderland is a small step up from Bradford, and an average property will set you back £146,202 before you start looking at additional costs. In 2017, prices were lowest in March, when they were only £109,082. The total upfront cost is £26,556.
Stoke-on-Trent – Potential buyers in Stoke-on-Trent can look forward to prices of £152,795 on average – as well as upfront costs of only £27,578.
London, at the other end of the scale, not only offers a £693,143 average property cost but upfront costs of £125,195.
For more information on the hidden costs involved in buying your first home, and to keep a checklist of how much your dream property will set you back, check out the full research on the TotallyMoney website here.
