What is the Cost of Buying a House in 2022?
The average cost of buying a house in the UK is £32,771, based on a 3-bedroom property at £267,000, the current UK average house price. This can vary depending on the location and size of the property, the conveyancer you choose and what type of survey you need. Other factors include Stamp Duty, removal costs and self-storage.
Compare My Move work with property and financial experts to provide you with everything you need to know about the costs of buying a home, which we have broken down in this article.
Basic Costs of Buying a House
Below are the basic upfront costs of buying a house including mortgage costs, surveying and conveyancing. These will vary depending on the location, size and value of the house and the type of survey you need.
| Service | Cost |
|---|---|
Mortgage Deposit | Usually 10% of the house price |
Mortgage Fees | From £274 |
Mortgage Broker | Average £500-£600 |
Surveying | From £250 |
Conveyancing | From £860 |
Stamp Duty | £3,350* |
* These figures are based on current UK averages and may vary.
Extra Costs of Buying a House
Below we've collated the additional costs to consider when buying a house. These are based on the UK averages and include the cost of hiring a removal company, renting a self-storage unit and utilising mail redirection through The Royal Mail.
| Service | Cost |
|---|---|
Removal Costs | £264 - £1,680 |
| Storage | £23.94 per square foot (UK average) |
Mail Redirection | From £33.99 |
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Upfront Costs of Buying a House Explained
The cost of buying a house is made of a number of fees and expenses, from the initial deposit to the cost of a removal company. However, there are a few substantial costs that play a big part in the early stages of the house buying process. Below we go through these costs in detail, looking at UK averages and what the fees include.
Mortgage Deposit
A 10% deposit for the UK average property price, which is currently £267,000, is £26,700. This is the amount you initially put towards the cost of the property when taking out a mortgage. On average, a mortgage lender will require a minimum of 5% to 20% of the purchase price and typically buyers will put down 10% of the purchase price. The bigger the deposit you can afford to put down, the better your mortgage deal and the lower the interest rate will be.
Your mortgage deposit will likely be the largest expense when buying a house and is one of the biggest hurdles for those looking to buy a property. Unsurprisingly, many young people aren't able to get on the property ladder without the help of parents, such as via a gifted deposit. However with the Lifetime ISA and Help to Buy Schemes and the increase of 95% mortgages available, there is help available to those struggling to save.
For more information on saving for a deposit read: How to Save for a Mortgage Deposit
Mortgage Fees
When applying for a mortgage, you will need to save for more than just the mortgage deposit. Getting a mortgage will come with fees, with the amount varying from lender to lender. Below is a table of the mortgage fees you may need to pay for.
| Fee | What is it? | Cost |
|---|---|---|
Arrangement Fee | An arrangement fee is paid to your lender for setting up the mortgage. You can choose to add it to your mortgage payments or pay upfront. This can vary based on your lender and the type of mortgage you have. | £0 - £2,000 |
Booking Fee | A booking fee is charged when you apply for a mortgage. It’s often non-refundable, even if you don’t end up going ahead with the mortgage. Some mortgage providers may include it as part of the arrangement fee | £99 - £250 |
Valuation Fee | A valuation fee is paid to your lender to carry out a mortgage valuation that will value the property. It will reassure them that the home is worth the amount they are lending. This can sometimes be free, depending on your mortgage lender. | £150-£1,500 depending on the price of the property |
Telephonic Transfer Fee | A telegraphic transfer fee is what your mortgage lender will charge you for sending the money to your solicitor. | £25-£50 |
Mortgage Broker
Although this is not required to buy a home, some buyers opt for using a mortgage broker to advise them on which lender to take out a mortgage with. On average the cost of a mortgage broker is around £500-600 (fixed fee), with any additional costs added after completion.
To find out more read: Do You Need a Mortgage Broker?
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Surveying
A survey will give you a better idea of the condition of the property you are looking to buy and, if necessary, any maintenance and/or repairs it requires. Below is a breakdown of the various surveys and costs, stating which survey is best for the type of house you are looking to purchase.
| Survey Type | Cost |
|---|---|
RICS Home Survey Level 1 | From £250 |
RICS Home Survey Level 2 | From £350 |
RICS Home Survey Level 3 | From £500 |
Snagging Survey | £300-£600 |
1. RICS Home Survey Level 1
The most basic report, the RICS Home Condition Survey is the cheapest of the surveys available from around £250. It will outline the condition of the property and draw attention to any urgent defects or potential legal issues. This is best suited for a new build or a newer “conventional” home in good condition.
To find out more about a Level 1 Survey see: What is a Condition Report? (Level 1 Survey)
2. RICS Home Survey Level 2
The RICS Home Survey Level 2 starts from around £350 for properties worth up to £99,000, with the typical cost being around £500 for a house priced between £100,000 and £249,000.
This survey will highlight any major issues and give you a good understanding of the condition of the property. The survey will look for any rot, dampness and condensation and review the condition of ceilings, walls, floors and joinery.
To read more about the Level 2 Survey visit: What is a Homebuyer Survey? (Level 2 Survey)
3. RICS Home Survey Level 3
The cost of a RICS Home Survey Level 3 typically starts at £500 - £600. This is the most comprehensive survey, suitable for all residential properties but recommended for older or unusually constructed houses or properties in poor condition.
This survey will detail any faults and work required on the home and could potentially save you money by highlighting any issues before they develop. It can also provide you with the necessary evidence to negotiate the price of the property if any major work is highlighted.
For more information about Level 3 Surveys go to: What is a Building Survey? (Level 3 Survey)
4. New-Build Snagging Survey
Snagging surveys usually cost between £300 - £600 depending on the size of the new-build. This is an independent inspection to look for any issues with a new-build property. Professional surveyors will usually report any findings to the developer, this way any issues can be addressed in a timely manner.
For more on Snagging see: How Snagging Lists Can Help New Property Owners
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Solicitor Fees For Buying a House
Whether you are buying or selling a house, you will need a conveyancer to handle the legal side of the transaction The average conveyancing fee for buying a house are £1,040, including VAT at 20%. Keep in mind that these fees will depend on the size, location, value of the house and the conveyancer you use.
Below we’ve given an idea of what the average cost of conveyancing may be in relation to the cost of the property.
| Property Value | Average Freehold Cost* | Average Leasehold Cost* |
|---|---|---|
Up to £100,000 | £860 | £1,030 |
£100,001 to £200,000 | £930 | £1,110 |
£200,001 to £300,000 | £1,040 | £1,230 |
£300,001 to £400,000 | £1,120 | £1,310 |
£400,001 to £500,000 | £1,200 | £1,390 |
£500,001 to £600,000 | £1,410 | £1,560 |
£600,001 to £700,000 | £1,440 | £1,630 |
£700,001 to £800,000 | £1,670 | £1,850 |
£800,001 to £900,000 | £1,810 | £2,010 |
£900,001 to £1,000,000 | £1,900 | £2,100 |
*This an indication of cost from a sample of average fees from 50 licensed conveyancers across the UK.
In addition to the legal fee paid to the conveyancer, the overall cost will include conveyancing disbursements that your conveyancer will pay on your behalf.
Conveyancing Disbursements are the fees and taxes that your solicitor has to pay to other organisations or third parties, including an environmental search and local authority search.
Below we've included a table of costs breaking down various conveyancing fees:
| Fee | Average cost |
|---|---|
Solicitor's Legal Fee | £569 |
Conveyancing Search Pack | £290 |
Anti-money Laundering Checks | £6 |
Bank Transfer Fee | £40 |
Transfer Ownership with Land Registry | £135 |
To find out more about conveyancing costs read: How Much are Conveyancing Fees When Buying or Selling a House?
Stamp Duty
Stamp Duty for the UK average property price, which is currently £267,000, is £3,350. Stamp Duty Land Tax is paid when purchasing a home worth more than £125,000 in England and Northern Ireland. First Time Buyers do not have to pay tax on any property costing up to £300,000. If their home cost more, they would pay 5% stamp duty on the portion of the cost above £300,000 and up to £500,000.
In Wales, Stamp Duty Land Tax was replaced by the Land Transaction Tax and the Buildings Transaction Tax (LBTT) in Scotland, which is not applicable to properties under £145,000. Both LLT and LBTT are applied up to a maximum of 12%. You can get an idea of what Stamp Duty will cost when buying a house by using our Stamp Duty Calculator.
Below we've listed the Stamp Duty Tax Rates based on house price, in addition to the cost of Stamp Duty for second homes:
| House Price | Stamp Duty Rate | Second Home Stamp Duty Rate |
|---|---|---|
| Up to £125,000 | 0% | 3% |
| £125,001 to £250,000 | 2% | 5% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5 million | 10% | 13% |
| £1.5 million+ | 12% | 15% |
For more information on Stamp Duty see: What is Stamp Duty?
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Additional Costs of Buying a House
When planning your budget, don't forget to factor in the cost of removal services, professional packing, self-storage and mail redirection.
House Removal Costs
The estimated cost of moving house based on a 3-bed house, with the removal company travelling 50 miles is £1,181. It is worth noting that this figure is based on the average 3-bedroom property in the UK and that the price depends on the company you choose, your location and the length of the journey.
Other factors to keep in mind with regards to cost includes whether you require a professional packing service and the dismantling and reassembling of furniture. Depending on the size of the house and distance between properties, the cost of moving companies will range between £264 and £1,680. Remember you can save up to 70% on your removals costs by comparing companies via Compare My Move.
Mail Redirection
You will need to arrange to have any post redirected and sent to your new address. The Royal Mail charges £33.99 for redirection of mail within the UK for a period of three months.
Mail redirection is based on the resident’s surname and applies to as many people with the same surname living in the property. If you are moving with someone who has a different surname, they will also have to pay for redirection.
Storage
During the house buying process, you may need to consider using a storage facility. This could be for furniture acquired prior to the purchase of your home, or if you find yourself between house moves.
The Self Storage Association (SSA) reports that the average rental cost of self-storage in the UK is £23.94 per square foot. Be aware that storage costs will vary between companies and across the country. The cost of a storage unit will also depend on whether you opt for a specialised unit such as climate-controlled storage.
For more information read: How Much Does a Self Storage Unit Cost?
Insurance
According to the AA British Insurance Premium Index, the average combined home and contents insurance policy cost £161.75 - working out at just £3.11 a week.
Your mortgage lender will require you to purchase buildings insurance, starting from the day of completion. This must cover both the exterior building, any extensions, sheds or outhouses. Contents insurance is also advisable to protect the items within the home.
Buildings Insurance
Buildings Insurance will cover any permanent fixtures and fittings such as bathrooms and kitchens, in addition to the walls, floors and roof of your home. Ensure this also covers accidental damage. To learn more read, how much is buildings insurance.
Contents Insurance
Contents Insurance will cover the belongings in your home such as tech, furniture and flooring. Building and contents insurance costs can be spread out over the year and paid monthly, with costs varying depending on the size of the property and the value of both the property and your possessions.
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Next Steps of Buying a House
This article is part of our home buying guide. In our series of articles, we explain everything you need to know about the buying process. In the next article, we break down the time scale of buying a house, from mortgage application to completion day. Find out more read how long does it take to buy a house.
