Don’t get caught out: First time buys unprepared for additional costs

Buying a house is as simple as saving up a deposit, securing a mortgage, then making an offer, right? In simple terms, yes, but on top of these large costs and decisions there are lots of further additional costs that can quickly add up over time. First time buyers, new to the property market and perhaps blind to the ins and outs of purchasing a home, are discovering they are unprepared for additional costs and in some cases may have to pull out of a purchase.

Here is a list of these extra expenses that must be considered:

Mortgage booking fee

This usually averages at around £99, and can sometimes be referred to as a ‘reservation’ or ‘application’ fee. It’s worth noting that it isn’t refundable if you back out of the sale and mortgage, however most lenders don’t charge for reserving your mortgage.

Mortgage arrangement fees

Not all lenders charge one of these, but some will ask for up to £2,000 up front to arrange your mortgage. The average cost is around £1,000 but there are some lenders who will offer products with no charges and it’s best to consider these first. You can add your arrangement fee to your mortgage; however, this does mean you will pay significantly more as it accumulates interest.

Valuation fee

This fee can be issued by a lender to pay for the survey they will conduct on your property. This isn’t a survey to discover any hidden issues with your new potential home either, it is so they can determine how much they think the property is worth and whether it offers security for the money they are lending.

Financial advice

There are many financial advisors out there offering free advice – because they make commission if you take on a product they suggested – however be aware that many mortgage brokers and consultancy services do offer a small fee. For many this is around £300.

Building insurance fee

Some lenders will charge to carry out a check that you have taken out buildings insurance, if you have not purchased it through them. This is usually between £25 – £50 but is another potential, additional, cost to consider.

Legal fees

A conveyancer is required to complete the sale of a property and they charge significant fees that usually average out at around £2,000. This cost includes Stamp Duty, which varies depending on the price of the property being purchased – in the UK, the average house price is around £214,000 which means the average Stamp Duty cost is £1,780. Also Stamp Duty must be paid within 30 days of buying a property, so this is another cost you may have been aware of but not realised that it requires immediate payment.


There are three types of survey to choose from when purchasing a property:

  • Home condition survey – this is a basic check, usually reserved for new builds, and typically costs around £250.
  • Homebuyer’s report – this is a full survey which looks inside and outside the property and costs around £400.
  • Building or structural survey – this is a comprehensive survey and best if you are buying an old property to ensure there are no expensive fixes to pay out for in the future. These are less popular simply because they cost £600 or more.

Buying your first home is very exciting, but before making any offers it’s important you take these additional costs on top of a deposit and mortgage repayments into consideration. Always save more than you think you may need and cover these additional costs.