Setting foot on the first rung of the property ladder usually turns out more expensive for homebuyers as they are planning for less right from the start, insurer Aviva says.
The average first-time buyer’s budget is by £6,481 below the actual cost of the purchase, new research from Aviva has found.
People usually save up for their first home for about four years and the average amount they set aside is £12,143, while the average total amount actually needed is closer to £18,624.
This miscalculation costs more than half of first-time buyers an extra two years and eight months of waiting until the are able to purchase a property.
Three-quarters of those polled admitted they are not doing enough research on the total cost of buying a new home.
A fifth of those looking to get on the property ladder would consider buying a house in need of significant renovation or repairs. This, however, comes with a price tag on its own.
Aviva’s research shows that homeowners spend an average £3,727 on essential repairs to their newly-purchased home, which usually exceeds their initial cost expectations by around £1,680.
Heather Smith, marketing director at Aviva, comments:
“Scraping together the cash for the deposit alone can be a mammoth task, but that’s just the first hurdle. It’s the other essential costs such as solicitors’ fees and Stamp Duty which can be the sting in the tail – not forgetting any essential repairs which might be needed once the keys have been handed over.
“First-time buyers face walking into a money pit if a first dream home turns out to be a nightmare. If the cash outlay needed to buy the house isn’t expensive enough, a hefty bill for unforeseen essential repairs is the last thing needed.
“Anyone looking to buy a home should investigate every nook and cranny of the property before putting in an offer and must not be afraid of asking for several viewings”.
House Buying: Budget versus Actual Spend
(Data compiled by OnePoll on behalf of Aviva)
| BUDGET | ACTUAL SPEND | |
| Deposit | £6361 | £8672 |
| Stamp duty | £1486 | £2389 |
| Fix/improvements | £2047 | £3727 |
| Solicitor’s fees | £489 | £756 |
| Survey | £287 | £496 |
| Mortgage fee | £339 | £548 |
| Mortgage valuation | £259 | £476 |
| Plot reservation | £215 | £393 |
| Furniture | £581 | £1007 |
| Contents insurance | £38 | £78 |
| Buildings insurance | £41 | £82 |
| TOTAL | £12,143 | 18,624 |
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