When it comes to buying a new home, it’s easy to overlook the additional factors which make the real cost significantly higher than just the basic price. From consideration of energy bills to unexpected costs of storage and removals, there are plenty of things that will chip away at your budget. In this article we take a look at various costs which you need to consider when purchasing a property. Stamp duty One area that can significant raise the cost of buying a house is stamp duty. For those at the lower end of the housing market, there’s no cost up to a purchase price of £125,000. From £125,001 to £250,000 a 1% surchage applies, and when the cost moves above £250,000 the figure jumps to 3%; this can add thousands of pounds to the average UK property purchase, and must be budgeted for carefully. If you’re considering purchasing a property around the quarter of a million pound mark, it will be well worth your efforts in trying to negotiate the vendor down below this magic figure! Stamp duty must be paid shortly after completion, so make sure you have the necessary funds available. Energy bills The UK is currently experiencing near-record gas and electricity prices, despite some providers fighting the trend. Energy bills are a big factor in a house purchase, especially if you’re moving to a bigger building which may require additional heating and lighting. Of course, if you’re down-sizing or moving to a more energy-efficient property this is less of an issue, but it is still a key factor to consider when looking at a new purchase. Rent and maintenance charges Some properties are freehold, with no ground rent payable, but many houses – both older and on new developments – may attract an annual ground rent; this is often paid to a third party landlord or leaseholder. Often the cost is small, but it is crucial to discover the costs before you move. Similarly, apartment blocks and new developments often come with built-in maintenance contracts, meaning you could again fork out hundreds of pounds yearly to ensure your neighbourhood is well-maintained. Again, do your homework and make sure you can cover any such costs. Removals and storage Moving is a very stressful time, especially if you are part of a chain or need to vacate a property early to satisfy the terms of your contract. There can also be delays in moving into a new house for any number of reasons. This can often mean that you are forced to put furniture and possessions into storage, and this is not a cheap option – bills for larger units can run into many hundreds of pounds per month. Removal costs are also a big factor, especially if you’re moving two households into one! Make sure you shop around for a number of quotes for both storage and removals and don’t just take the cheapest option – you’ll need to make sure everything is correctly insured, and that you rent adequate space to store everything you need. Surveys Surveys are an integral part of property purchases, and can take various forms – for newer properties, it’s often enough to have a basic mortgage valuation survey (though this can be upwards of £500), but to be on the safe side request a full structural survey. It may cost a lot of money up front, but it’ll save you the hassle of discovering expensive repairs or problems post-purchase.
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