Conveyancing or solicitor fee

It’s essential to hire a solicitor or licensed conveyancer to make sure the legal side of purchasing a property is handled correctly. Conveyancing fees can be divided into two parts:

Legal fees: this covers all the work done by the solicitor or conveyancer, such as checking property title deeds, exchanging contracts, transfer of payment to the seller and dealing with the Land Registry.
Disbursements or payments to third parties: this includes local authority searches for anything that might negatively affect your new home, such as planning permission for a new housing estate or road nearby.

Conveyancing fees vary but are typically between £850 - £2,000. Ask for a written conveyancing quote with a breakdown of all the costs involved so you fully understand what is included. Prices vary with the value of the property you are buying, whether it is leasehold or freehold and the searches done.

While some solicitors charge by the hour and for every letter or phone call, others offer a fixed fee. Some firms offer a “no sale, no fee” guarantee. This means if the sale falls through, you won’t have to pay legal fees other than the third-party costs which have already been incurred.

Compare conveyancing quotes in your local area with Localconveyancingdirect.co.uk

Surveyor’s fee

House surveys are optional. But buyers are strongly advised to commission their own independent survey to check for problems which may not be obvious to the untrained eye, such as subsidence or damp. Surveys are usually carried out by a Chartered Surveyor who is a member of the Royal Institution of Chartered Surveyors (RICS). Money spent on a survey can help save you a fortune in repair bills further down the line. Surveyor fees are relative to the size of property and how comprehensive the report is. Typically, they cost between £250 to £600.

A Homebuyer Report is ideal for modern, conventional properties in reasonable condition. Prices start at around £300. But if you are confident the house is in good nick and don’t plan to do any work to it, a basic Condition Report maybe sufficient. If you are buying a new-build property, a professional snagging report should be done.

Meanwhile a more detailed or Full Building Survey is particularly suitable for older properties which have been altered over the years or if you are planning major works. Expect to pay between £400-£500. If you are buying an old or unusual property, such as a barn that you plan to convert into a home, then a Structural Inspection (looking at the foundations, walls and roof) is typically recommended. This is the most expensive and in-depth survey with prices starting around £500-£600.

Lender’s mortgage valuation fee

Most people will need to take out a mortgage to purchase a property.  As part of approving a mortgage, a bank or building society will need to value the property you want to buy to ensure it’s worth the amount they are lending.

While valuations are commissioned by mortgage lenders, it is the buyer who must foot the bill. The cost of the valuation depends on the value of the property. Mortgage valuation fees start at around £150 for a £100,000 house. Some lenders don’t charge a fee as an incentive to take out a mortgage, including it in the deal.

Remember a valuation is simply that – it won’t point out repairs that will need to be done or offer advice. It may be worthwhile (depending on the type of property) upgrading to a Home Buyer Report and Valuation Report. This provides the basic valuation for the lender and a Homebuyer’s report to you.

In Scotland, valuations are included in a home report.

Mortgage arrangement fee

More than half of mortgages come with an arrangement fee for setting up the loan, according to Moneyfacts. These fees can vary from a few hundred pounds to £2,000-plus. The amount will vary depending on the lender and mortgage deal.

Opting for a no-fee mortgage may seem like a no-brainer but these products typically come with higher interest rates. If you choose a deal with a fee but can’t afford to pay upfront you can have it added to your mortgage but bear in mind you will pay interest on the extra borrowing which over the average 25-year term mortgage can add up. Always work out the total cost of a mortgage by comparing the rate, fees and length of the deal.

Mortgage broker fees

Your choice of mortgage can save you – or cost you – many thousands of pounds. Buyers are increasingly turning to brokers for advice on obtaining a mortgage rather than simply relying on banks and building societies. Some mortgage brokers charge a fee for their service which can be anything from a few hundred pounds to £1,000-plus while others provide a fee-free service, relying totally on commissions from lenders. So, this is one additional cost of buying a house that you can avoid.

Always check your broker or mortgage advisor can search the whole of the market for the best deal rather than being limited to a panel of lenders. Commissions should be discussed openly at the start and the overall effect this will have on the amount you pay should be calculated. Check your broker or mortgage advisor is sufficiently qualified to advise you by ensuring they have a CeMAP or CertMA qualification and they should by regulated by the Financial Services Authority (FSA). Don’t feel pressured into using an estate agent’s mortgage broker.

Estate agent fees

It is always the seller who pays estate agent fees, not the buyer. Of course, if you are selling a property as well as buying a new one, the amount charged by your estate agent must be taken into account. Traditionally, estate agent fees are charged as a percentage of the property price, around 1.5 to 2%. Some online estate agents, however, charge a fixed fee for selling a property, regardless of its value. Check there are no hidden extras which bump up the total cost.

There is a growing trend to buy property at auction. Buyers need to be aware there are extra administration fees that will be charged as part of this process. Read our separate guide to buying a property at auction.

Other costs

There are a few other costs to bear in mind, such as removals. If you know a man with a van, you may be able to do this for free. But if you have a lot of furniture, then you will probably need to hire a professional removals firm. Costs can vary from a few hundred to a few thousand pounds depending on the distance travelled and size of load. Ask for quotes from at least three different firms.

This article hasn’t included Stamp Duty – a tax (rather than a fee) paid to HM Revenue and Customs when buying a property over £125,000. It is the buyer who must pay and this is often the largest additional cost. How much you must pay will vary with the value of the property you are purchasing. First time buyers are exempt from paying anything on the first £300,000 and pay 5% on £300,000 to £500,000.

Buying a house is an expensive business. Set aside between £5,000 to £10,000 to pay the extra professional fees. You don’t want to be left completely penniless after moving into your new home.