When purchasing a property, it’s easy to overlook the additional expenses you’ll have to pay on top of the purchase price. Don’t get caught out by unexpected fees and make sure you budget for all these hidden costs of buying a house…
Deposit
While the deposit isn’t strictly a ‘hidden’ cost as it counts as payment towards the property price, it is worth thinking about. The amount you can save and pay upfront for a house will affect how much you can borrow as a mortgage. Lenders are interested in loan-to-value ratio (LTV) i.e. the amount of money borrowed compared to the value of the property. The larger the deposit, the lower your LTV, and the lower your mortgage rate is likely to be.
The lower your LTV, the more options you have and, quite likely, the lower your monthly mortgage repayments will be. You may be able to get a 95% mortgage, having saved for 5% of the property value, but a 10%+ deposit is a good goal.
Hidden costs when buying a house UK
Buying a property is an exciting but daunting experience. There is a lot to think about and specific procedures to follow, so it’s no wonder many buyers don’t realise there are many more costs involved beyond the deposit they’ve carefully saved.
Mortgage fees
Once you have saved a deposit and are looking for a mortgage, there are sometimes additional costs to factor in which will depend on which lender you choose. Here’s a guide to approximate mortgage costs on top of your loan:
- Booking fee (£100).
- Arrangement or product fee (£500-£2,000+).
- Mortgage valuation survey (sometimes covered by the lender £150-£800).
- Legal and conveyancing fees (£2,000, including 20% VAT + local searches £250-£300.
A solicitor/conveyancer will legally oversee the exchanging of contracts and carry out all the steps required to complete your purchase.).
- Broker charges (usually recouped by achieving a favourable mortgage deal).
- Interest (the amount of interest you pay on your mortgage depends on your contract).
You may also choose additional optional costs e.g. higher lending charges if you have a smaller deposit.
Survey costs
One of the potential costs of buying a home is the survey, which can cost approximately £400 to £1,500. Depending on the condition of the property you buy you may need to ask a surveyor to carry out a relevant inspection to make sure there are no unexpected issues with your purchase. The information they provide will help you decide whether to go ahead with the purchase and/or if you need to negotiate with the seller.
There are several types of survey available allowing you to choose the most relevant and price-appropriate for the property:
- Level 1 Home Condition Report – ideal for new properties that appear in good order
- Level 2 HomeBuyer Report – for conventional properties that are reasonably new
- Level 3 Building Survey – often called a structural survey, designed for older, large or unusually built properties
Stamp Duty
Let’s move on to Stamp Duty Land Tax (SDLT or stamp duty). This tax is paid to the government when you buy a property in England or Northern Ireland. It’s not included in the list price, is calculated as a percentage of what you pay for the property and can add thousands to your costs.
This table shows the thresholds to calculate the stamp duty owed, and you can also use an online calculator:
Stamp duty rates from 1st April 2025
| Property value | Stamp duty rate |
| Up to £125,000 | 0% |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example:
For a £300,000 house, the amount of stamp duty owed is:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the remaining £50,000 = £2,500
Total stamp duty to pay = £5,000
First time buyers are offered some stamp duty relief to help reduce the costs of buying a house and have slightly different thresholds. If everyone buying the property is a first time buyer:
| Property value | Stamp duty rate |
| Up to £300,000 | 0% |
| The next £200,000 (the portion from £300,001 to £500,000) | 5% |
| If the property is over £500,000 | No relief given – normal rates apply |
It’s also worth noting that if you already own a property/properties and are buying an additional one, you will have to pay an extra 5% stamp duty on top of the usual rates.
Insurance
You’ll need to buy buildings insurance for your new property (this is often a mandatory condition of a mortgage agreement) and will most likely want to get contents insurance, too. A combined product can save money and you should shop around for the best deal. Average costs per year:
- £298 for buildings insurance
- £132 for contents insurance
- £375 for both buildings and contents insurance
Life insurance can also be a good idea as it will cover the cost of your mortgage if you pass away. There are many options available that can cost as little as £10 per month. You might also consider looking into critical illness insurance or income protection insurance, which will provide an income if you fall ill/become disabled and are unable to work. An Independent Adviser can help you with this.
Moving costs
The price of physically moving all your belongings is worth considering as you may decide to hire a full service, rent a van, buy packing materials and/or require storage. Also add in childcare costs and kennel fees if required on moving day.
Upgrades and maintenance
When you move in, what will you want to do to the property? Budget for any upgrades, installations and decorating and remember to keep some money ready for unexpected or sudden repairs. New builds are less likely to require expensive works by a new buyer, so think about the property you are buying and its overall condition as you save.
Other expenses
In addition to all the costs above, make sure you research and set aside the amount you’ll need for:
- Council tax
- Ground rent and service charges
- Utilities, including setup costs e.g. water, gas, electric, broadband, etc.
- Residents’ parking
- Redirecting your post
Find out more
Buyers are often surprised by the hidden costs of buying a house and it’s stressful to face unexpected fees. Hopefully this guide has helped reveal some of the expenses you need to factor into your move so you are calm, confident and prepared. Spend some time adding up your expected costs so that you can budget appropriately.
If you have any questions or would like to find out how we can support you, please get in touch with our mortgage advice team.