If you’re thinking about buying a house it’s important that you don’t just factor in the purchase price when calculating the affordability of the transaction. There are various other expenses that you will need to account for, and they’re often not cheap! Below we try and give some rough estimates to assist you with your planning.

Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT)

These are all taxes that must be paid by the person BUYING the property and NOT the person selling the property! The amount you pay (if you pay any at all!) depends upon the purchase price of the property.

  • Property purchases in England and Northern Ireland may incur a fee for SDLT
  • Property purchases in Scotland may incur a fee for LBTT
  • Property purchases in Wales may incur a fee for LTT

Below are the bandings which detail how much tax must be paid based upon the purchase price:

Stamp Duty Land Tax (England and Northern Ireland)

Purchase PricePercentage Of Price
Up to £125,0000%
More than £125,000 and less than or equal to £250,0002%
More than £250,000 and less than or equal to £925,0005%
More than £925,000 and less than or equal to £1,500,00010%
More than £1,500,00012%

Land and Buildings Transaction Tax (Scotland)

Purchase PricePercentage Of Price
Up to £125,0000%
More than £125,000 and less than or equal to £250,0002%
More than £250,000 and less than or equal to £925,0005%
More than £925,000 and less than or equal to £1,500,00010%
More than £1,500,00012%

Land Transaction Tax (Wales)

Purchase PricePercentage Of Price
Up to £180,0000%
More than £180,000 and less than or equal to £250,0003.5%
More than £250,000 and less than or equal to £400,0005%
More than £400,000 and less than or equal to £750,0007.5%
More than £750,000 and less than or equal to £1,500,00010%
More than £1,500,00012%

Property Valuation

If you are mortgaging your home, the company you are borrowing money from will want to ensure that the property is worth the money!

The cost of a property valuation for mortgage purposes usually ranges from £100 to £400 depending upon the size of the property. The mortgage lender will usually insist on you using their trusted property valuation services, so it’s worth finding out the cost of this prior to obtaining a mortgage in principle. Also note that you don’t always have to pay this cost up front – most lenders will allow you to add it on to your mortgage instead.

Property Reports and Surveys

It’s worthwhile getting a survey done to ensure that the property you are purchasing isn’t falling apart! These can range from £200 to around £1,000 depending upon the type of survey you are purchasing. We would recommend you choose a qualified member of the Royal Institution of Chartered Surveyors (RICS) to carry out the survey.

Survey and Report types at RICS start with the most basic option called a Home Condition Report (HCR). The HCR is a basic traffic light system (red/amber/green) that identifies the condition of various elements of the property. There is no advice given, and as such this report is generally more suited to new build properties.

Our recommendation for most properties in a reasonable state is the HomeBuyer report (HBR). This report is more detailed and offers advice on defects that may affect the property, potential repairs required and ongoing maintenance.

If the property you are purchasing is a listed building or you suspect structural damage, it’s certainly worthwhile opting for the more detailed and comprehensive (and expensive!) Building Survey.

Mortgage Deposit

If you are mortgaging your home you will be required to pay a deposit to the mortgage lender. This is what forms part of the Loan To Value (LTV) of your mortgage product. For example if the LTV of your mortgage is 90%, this means you will be loaning 90% of the property value and will be required to pay 10% of the property value as a deposit. If the property you are purchasing has a value of £100,000 you will be required to pay £10,000 (10%) as a deposit to borrow £90,000 (90%) as a mortgage from the lender.

Legal Costs

You can’t just buy a property like you’re a buying a bag of sweets from the corner shop. There are legal elements required to transfer ownership of the property, and these need to be carried out by a fully qualified conveyancing solicitor. The cost of a conveyancing solicitor can range from £300 to £2,000 depending upon the size and value of the property.

On top of the solicitor fees, there is also a requirement for local searches and a Land Registry fee.

Local search fees are usually around £300 and contain checks for future developments in the area, tree preservation orders, listed buildings and a lot more. Searches are generally required to protect property buyers from any unpleasant eventualities.

Land Registry fees are required to legally transfer ownership of the property you are purchasing and can typically range from around £40 to £1,000 depending upon the size of the property.

An Example of Indicative Costs

Assuming you are purchasing a property for £250,000 in England using a 90% LTV mortgage, it would cost:

Stamp Duty = £5,000
Property Valuation for Mortgage = Approximately £200
Homebuyer Survey = Approximately £500
Deposit for Mortgage with a 90% LTV (10% of £250,000) = £25,000
Solicitors (including searches and Land Registry fees) = £1,600
Total = £32,300

Now you can see why it’s so difficult to get onto the property ladder!