Buying a Property, What Fees Will I Pay And When?

Buying a new home is exciting but can feel a little daunting with all the extra costs. You’ll need to budget for things like solicitor fees, stamp duty, and maybe mortgage broker fees. These payments can add up quickly! Knowing what to pay and when can make the whole process smoother and avoid surprises. Don’t worry—this article will explain all the fees step by step to help you stay on track!

Property Buying Cost Insights

Mortgage Broker Fees When Buying a Property:

When buying a property, it's important to account for various costs, including broker fees. Some brokers might add extra charges on top of the fee they receive from lenders. Hence, it's essential to understand a broker's fee structure before agreeing to their terms. Be alert to upfront fees and possible further charges later. By carefully scrutinising broker fees, you can potentially make some savings.

For more information, visit our broker fees page.

You can also check out our article Do All Mortgage Brokers Charge Fees? for more information on this subject.

Mortgage / Lender Fees:

Lenders will charge an Arrangement Fee and this is typically around £995. This fee can be paid separately or added to your loan, but please note that adding it to your loan will result in additional interest charges.

Additionally, your chosen lender may charge an admin or valuation fee upfront.

Lenders will often have deals with no fees to pay, however this will usually be at the expense of a higher interest rate so may not be the best deal for you.

Legal Fees:

When purchasing a property you will need to engage with a solicitor, also known as a conveyancer, for assistance. It is advisable to compare options and seek recommendations, maybe from your mortgage broker and the estate agent selling the property.

The professional fees for buying a property can vary among solicitors. However, you should budget around £1500-1800 to purchase a property and an additional £1,000 or so if you are selling your current home. This includes fees for Local Searches and Land Registry. Keep in mind that purchasing a leasehold property requires additional work, so fees will be higher.

It is worth enquiring if your solicitor offers a 'No Sale No Fee' service.

Stamp Duty Land Tax (SDLT)

You will also need to pay Stamp Duty Land Tax (SDLT) upon completion. From 1st April 2025 you can expect to pay:

Up to £125,000 Purchase Price - Zero

£125,001 to £250,000 - 2%

£250,001 to £925,000 - 5%

£925,001 to £1.5m - 10%

£1.5m plus - 12%

You usually pay 5% on top of these rates if you own another residential property. This 5% surcharge will also apply if you are looking to keep your current home for investment, known in the industry as Let to Buy.

Stamp Duty Land Tax (SDLT) for First Time Buyers:

From 1st April 2025 here’s what you’ll pay in Stamp Duty Land Tax (SDLT) as a first-time buyer:

• 0% SDLT on the first £300,000 of the property price.

• 5% SDLT on the portion between £300,001 and £500,000.

If the property costs more than £500,000, you won’t qualify for first-time buyer relief and must follow the standard SDLT rules for homebuyers.

Example

Let’s say you’re a first-time buyer purchasing a property valued at £500,000. Your SDLT will be calculated as follows:

• 0% on the first £300,000 = £0

• 5% on the next £200,000 = £10,000

• Total SDLT = £10,000

Click here for the Latest Stamp Duty Rates.

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Surveys:

When it comes to assessing a property, factors such as the type, age, and overall condition are important considerations. Depending on these factors, you may find it necessary to arrange for a detailed survey. While some lenders offer the option to upgrade their valuation, it's important to remember that this valuation is primarily for their benefit, not yours. While upgrading with your lender may be the most cost-effective option, it is generally advisable to seek an independent survey in order to have more choice and minimise your immediate costs. Seeking approval from your lender with minimal initial expense is often seen as a sensible approach.

Once your mortgage has been officially approved and mortgage offered to you in writing, you can engage with a local surveyor of your choosing. Expect to pay approximately £500 to £800 for a Homebuyers Report, while a full Buildings Survey can cost upwards of £800, depending on factors such as the property's size, location, and value. Visit our Should I Arrange A Survey page for more information.

Deposit:

You will decide how much you are putting down as a deposit at the start of the process, as this forms part of your initial discussions with your mortgage broker or bank, if that is your chosen route. However, your deposit will not be payable until your solicitor is in the process of organising Exchange of Contracts. Although timings vary from one purchase to the next, as a general rule of thumb purchasing a property is likely to take around 8 to 12 weeks to complete.

In most instances you will need to place a deposit of at least 5% of the purchase price - so £10,000 if you are buying a £200,000 property.

As you can see, purchasing a property is never without various cost considerations. With proper foresight and assistance from a mortgage broker, you can protect yourself against any surprise costs popping up at the last minute. Proper planning today could save unexpected expenses tomorrow.

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

Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.