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You are here: Home > Media > Press releases > The price may be right…but a quarter of house-buyers are clueless as to how much buying their home will REALLY cost them

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·  Nearly a quarter of house-buyers (24%) have no idea how much the extra costs associated with buying a home will amount to

·  One in ten (9%) think house-buying extras will only cost up to £1,000 – when in reality conveyancing fees alone could cost this much

First-time buyers received a shot in the arm following the Chancellor’s announcement that stamp duty on properties up to £250,000 will be suspended for those buying their first property this year and next.  However, research* from unbiased.co.uk, the professional advice website, highlights nearly a quarter (24%) of house-buyers have  worrying lack of knowledge when it comes to the additional costs that go into buying a home – beyond the deposit and mortgage – which can come as a nasty surprise if not budgeted for.

With house-buyers focused on how much they can borrow for a mortgage and saving for a deposit, other essential costs such as the survey, solicitor fees, and even stamp duty tax are not always sufficiently accounted for.  One in ten (9%) house-buyers estimate the extra house-buying costs won’t exceed £1,000 – when in reality the conveyancing fees alone could cost this much**.  Furthermore, a small percentage (4%) admit it never even occurred to them there are any additional costs!

In order to cover the additional costs of house-buying, over two fifths of house-buyers (41%) say they will dive into their savings.   Nearly a fifth (18%) plan to add these costs on to their mortgage. 

What are some of the ‘extra’ costs of house-buying?**

• Survey - these range from £50 to £1000 depending on the level of detail you wish from your survey.
• Solicitors fee - depending on where you are, the opening quote will range from £600 - £1000 for a basic service.  If your purchase becomes complicated, you will be charged for all extra work.
• Local, Environmental and Water Search - you will be charged for this by your solicitor and this costs between £250 and £300 depending on the local council.
• Stamp duty - stamp duty is a land tax on the property you are buying and is paid to the government, as a percentage based on the value of your home.  For example, the stamp duty cost on a £200,000 house would be £2,000 – unless you’re a first-time buyer where stamp duty on house sales up to £250,000 will be suspended for this year and next.

Karen Barrett, Chief Executive of unbiased.co.uk comments, “Buying a home is a huge financial commitment, and it is crucial for consumers to factor in all the additional costs involved in order to then calculate which price bracket they can afford. This involves thinking beyond your deposit and mortgage, and taking into account stamp duty tax, survey and solicitor fees, and other essential checks – not to mention how much you may need to spend on your home once you actually move in.  The Chancellor may have given first-time buyers a boost by temporarily suspending stamp duty on house sales up to £250,000, but the other costs will still add up to a substantial amount which needs to budgeted for in order to avoid getting a nasty shock.

“Consumers should ensure they seek advice from a whole of market mortgage adviser so they are fully aware of all the costs involved in house-buying before they find themselves out of pocket.  Especially if they decide to add these extra costs onto their mortgage – as the added interest will be on top of the value of your property – pushing the cost up significantly.   A whole of market mortgage adviser can guide you towards a solution which best suit your individual circumstances. It is also important to seek advice from a professional, qualified solicitor who specialises in conveyancing – so you can ensure you are getting the best advice and not paying more than you should.

“To find a local whole of market mortgage adviser and solicitor, log on to unbiased.co.uk and carry out a free and confidential search using our ‘find a mortgage adviser’ and ‘find a solicitor’ services.” 

ENDS

**Opinium Research carried out an online poll of 2,005 UK adults aged 18+ from 20th to 23rd November 2009

** sourced from www.whatprice.co.uk

Karen Barrett, Chief Executive, unbiased.co.uk: 020 7833 3131

Anna Schirmer/Anna Moulds/Charli Scouller, Lansons Communications: 020 7294 3682

For expert commentary or case studies from over 150 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook.

Twitter: @unbiased_co_uk

LinkedIn: Unbiased.co.uk - Online networking for professional advisers

About unbiased.co.uk, the professional advice website

The unbiased.co.uk portal is a free and confidential UK-wide search matching consumers with local professional advisers: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is currently inviting registrations for its ‘find an accountant’ service.  These searches enable consumers to find professional advisers by postcode, area of specialism, qualification and payment method. In 2009, unbiased.co.uk fulfilled half a million searches for local, professional advice. 

IFA Promotion, the organisation behind unbiased.co.uk, is now in its 21st year, and was set up to promote the benefits of independent financial advice to consumers.  IFAP is sponsored by the following companies:

Registered Office: unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606

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