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What are the costs involved in buying a property?

From property surveys to legal fees and Stamp Duty, buying a property can come with lots of unexpected costs. These can vary depending on your situation.

Before you start the process, make sure you’re prepared to cover these payments:

What is a property survey?

A property survey will look at the physical condition of your intended home. It’s not a legal requirement to have a survey, but it’s a good idea. If your home needs repairs after you’ve bought it, they may be expensive. Knowing about any issues beforehand could help you negotiate a lower price, or give you a reason not to buy the property. 

There are several types of surveys offering different levels of property inspection:

  • RICS Condition Report – the most basic type of survey
  • RICS HomeBuyer Report – a more detailed inspection of the inside and outside of the property
  • RICS Building Survey – the most comprehensive type of survey

What is a mortgage valuation fee?

Before agreeing to offer you a mortgage, your lender will typically arrange a valuation for mortgage purposes. This is an inspection of the property that will help them determine the maximum amount of money they’re willing to lend against it. 

You may need to cover the cost of this valuation. However, some providers may have no charge. It’s important to understand that a valuation for mortgage purposes is not the same as a property survey. It's prepared for your lender only – you won’t be able to rely on it.

Keep in mind, if you’re agreeing to pay above the value of the property, your mortgage lender may not agree to lend you the amount you need.

Explore: What is a mortgage valuation and how does it work?

What are conveyancing fees?

When you buy a property, a solicitor or licensed conveyancer will charge for the related legal work. They’ll also pass on any costs they incur for property searches – these are enquiries made by your conveyancer to find out more about the property you want to buy. 

Explore: Conveyancing and property searches: what you need to know

What is a Land Registry fee?

The Land Registry is a government department who register the ownership of land and property in England and Wales. They charge a fee when a property is registered to a new owner. Your solicitor or licensed conveyancer may deal with Land Registry directly, and the amount charged will depend on the property price.

What is Stamp Duty Land Tax?

When you buy a property in the UK, you may need to pay tax. 

In England or Northern Ireland, this is called Stamp Duty Land Tax (SDLT). In Wales, it’s called Land Transaction Tax (LTT), and in Scotland it’s called Land and Buildings Transaction Tax (LBTT).

The amount of Stamp Duty you pay will vary, depending on a number of factors. For example, whether you’re a first-time buyer and the purchase price of the property. 

Explore: When do you have to pay Stamp Duty?

What is a mortgage arrangement fee?

An arrangement fee is what you pay a lender to arrange and process your mortgage. It is sometimes known as a product fee or completion fee.

What is buildings insurance?

Most mortgage lenders require you to have buildings insurance in place when you exchange contracts on a property. 

Buildings insurance protects you against the cost of repairing or rebuilding your home from scratch, should it get damaged, so it’s important to consider getting the cover you need. 

Explore: How much home insurance do you need?

What are removal costs?

One of the final expenses associated with buying a new property is the cost of hiring a removal company. This is to transport your furniture and other belongings to your new home.

If you’re moving a considerable distance away from your current home, or have a lot of large furniture, this service may be expensive.

Your home may be repossessed if you do not keep up repayments on your mortgage.