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Some 25% of those buying a property in UK unaware of costs involved, report shows - Zameen News

Some 25% of those buying a property in UK unaware of costs involved, report shows

April 9, 2010 • news

A quarter of people who buy a property in the UK have no idea how much their purchase will actually cost them, according to new research.

Some 24% are clueless about the cost and one in ten think house buying extras will only cost up to £1,000 when in reality conveyancing fees alone could cost this much, the research from professional advice website unbiased.co.uk shows.

Indeed it found that the additional costs of buying a property beyond the deposit and the mortgage can come as a nasty surprise if they are not budgeted for. Some 4% admitted that it just didn’t occur to them to take these costs into account.

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.

Asked how they would cover the additional costs of house buying, over two fifths, some 41%, said they would use their savings and 18% said they plan to add these costs on to their mortgage.

The research points out that the extra costs of house buying can mount up. The price of a survey can range from £50 to £1000 depending on the level of detail required. Solicitors fees, depending on where you are, can range from £600 to £1000 for a basic service. If the purchase becomes complicated they can be much more.

Then local, environmental and water search costs can be between £250 and £300 depending on the local council.

Most people know they have to pay stamp duty but not necessarily how much this will be. It 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, except for first time buyers where stamp duty on house sales up to £250,000 will be suspended for this year and next.

‘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,’ said Karen Barrett, the company’s chief executive.

‘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,’ she added.

[Property Wire News]