Buying a house is one of the biggest financial commitments most people make in their lifetime. While the price of the property itself is the most obvious expense, there are a range of hidden costs that can quickly add up. In this blog, we will go over the hidden costs so you can factor them into your budget.
1. Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax (SDLT) is a key cost when buying property in England and Northern Ireland. It’s a tax you pay when purchasing a home above a certain price, and the amount depends on the property price, your status as a buyer (first-time buyer, additional property, etc.), and whether it’s for residential or commercial use. As of 1 April 2025, the thresholds for paying Stamp Duty have changed.
The current Stamp Duty Land Tax rates are as follows:
• £0–£125,000 (or £300,000 for most first-time buyers) = 0%
• £125,001–£250,000 = 2%
• £250,001–£925,000 = 5%
• £925,001–£1.5m = 10%
• £1.5m+ = 12%
Additionally, if you already own a residential property worth £40,000 or more and are purchasing another property, you’ll need to pay an additional 3% on top of the normal rates for each band. From 1 April, this additional surcharge has increased to 5% for properties up to £125,000 and rises for higher-value properties. As stamp duty is a major cost in the home-buying process, understanding how the SDLT rates have changed and how they apply to your specific situation will be key in planning your budget.
2. Conveyancing fees
Conveyancing is the legal process of transferring property ownership from one person to another. Whether you’re buying or selling, you'll need a solicitor or conveyancer to handle the legal paperwork. While the fees vary depending on the complexity of the transaction, they typically range from £500 to £2,000. However, there could be additional costs for things like local searches, registration, and stamp duty calculations. Some conveyancers may also charge a fee for providing advice or conducting specific investigations.
3. Valuation and survey costs
Before purchasing a property, it’s recommended to get a survey to assess the property's condition. A standard mortgage valuation may only cost around £150–£300, but a more detailed survey—such as a Homebuyer’s Report or a full building survey—can cost anywhere between £400 and £1,500, depending on the size of the property and its location. A survey will help identify potential structural problems, damp, or other issues that could require costly repairs. While this may seem like an added expense, it could save you money in the long run by avoiding expensive surprises once you've moved in.
4. Mortgage arrangement fees
Many buyers are surprised to learn that securing a mortgage can involve additional costs beyond the interest rate. Mortgage arrangement fees can vary, ranging from £999 to £2,000, and may be added to your loan or paid upfront. These fees often cover administrative costs for processing your application and arranging the mortgage. Some lenders offer fee-free mortgages, so it’s worth shopping around to find the most competitive deal.
5. Insurance
Lenders will typically require you to take out buildings insurance before you can complete the purchase of the property. This insurance protects the property from damage caused by unforeseen events such as fire, storms, or flooding. The cost will vary depending on the size, location, and condition of the home but typically ranges from £100 to £300 per year. If you have a mortgage, you'll also need to consider life insurance to ensure your mortgage is paid off in the event of your death. The cost of life insurance varies based on factors such as your age, health, and the amount of cover required.
6. Moving costs
While many people focus on the cost of buying a property, the costs associated with moving are often overlooked. You’ll need to factor in expenses like hiring professional movers, renting a van, or purchasing packing materials. Moving can cost anywhere from £200 to £1,500 depending on how much you have to move and the distance involved. If you’re moving into a larger home, you may also need to purchase new furniture or pay for storage, which will further increase your costs.
7. Repairs and renovations
Even if you’re buying a new or relatively modern home, there are almost always some unexpected costs for repairs and renovations. Whether it’s fixing a leaky roof, redecoration, or updating outdated fixtures, these costs can add up quickly. Even if the property is in good condition, you might want to make improvements to suit your tastes, and that often means spending money on things like new carpets, kitchen upgrades, or landscaping.
8. Council Tax and utility bills
Once you own the property, you'll need to budget for ongoing costs such as Council Tax, water bills, gas, and electricity. The cost of Council Tax depends on the property band and local authority, but it can range from £1,000 to £3,000 per year. Utility bills also vary depending on the size of the home and your usage, so it’s important to have a rough idea of these ongoing expenses when planning your budget.
9. Ongoing maintenance costs
Homeownership comes with an ongoing commitment to maintaining the property. You’ll need to budget for regular maintenance costs, such as garden upkeep, cleaning, servicing the boiler, or replacing worn-out appliances. These costs are easy to forget but can amount to hundreds of pounds each year.
Final thoughts
When buying a house in the UK, it’s easy to focus on the deposit, mortgage, and monthly payments, but it's equally important to consider the hidden costs that come with owning property. From Stamp Duty to insurance, and moving costs to unexpected repairs, these expenses can easily add up. By thoroughly researching and budgeting for these hidden costs, you’ll be better prepared to manage your finances and ensure a smoother home-buying experience. After all, the key to a successful property purchase is not just being able to afford the house itself but also being financially prepared for the associated costs.
