When you buy a property, there are more costs involved than just the price of the bricks and mortar. The following is a breakdown of the charges you may have to pay.

The Arrangement Fee is a fee charged by mortgage lenders to cover the cost of setting up the mortgage. As an incentive, some lenders might waive this fee.

All mortgage lenders require a Lender’s Valuation (basic valuation) of the property in order to confirm that the property equates to the price. This is commissioned by the mortgage lender but you must cover the cost, which depends on the value of the property. Again, some lenders might waive this fee as an incentive.

It’s strongly advised that you arrange your own independent, more detailed survey. There are two types of survey – the Homebuyer’s Report, which costs in the region of £250 and £500 – and – a more comprehensive Structural Survey, which can cost anything up to £1,000 depending on the value of the house. Ensure that if you are purchasing an older house, you allow for any specialist checks.

You will also need to employ the services of a solicitor, who will deal with all the legal and conveyancing aspects of the purchase. As there is no standard fee for this, it’s recommended that you shop around for the best rate and also someone who you feel confident in. Some solicitors charge a flat fee while others charge a percentage of the property value (normally up to 1%). The fee will also take into consideration the amount of paperwork involved, how much skill is required and how complicated the transaction will be.

You will also have to pay for the legal work completed by your mortgage lender’s solicitor. Again, prices vary, so ask your lender to clarify their charges. If you use the same solicitor as your lender, this may save money.

Stamp Duty is a government tax, currently* charged for properties above £120,000. If your new home is priced between £120,000 and £250,000, you will have to pay 1% of the purchase price. From £250,000 to £500,000, it will be charged at 3% and for properties over £500,000 at 4%. If you're buying a home in an area designated by the government as ‘disadvantaged’, you will not be charged any Stamp Duty if the purchase price is £150,000 or less.

*Figures may change with any new government initiatives

The Land Registry is a government department which looks after the database of all registered properties in England and Wales. It charges a fee, depending on the property price, for transferring the registration to the new owner. Please see the government’s website for current charges.

Local searches will be undertaken by your solicitor to ensure that there aren’t any potential problems such as planning permission, neighbouring land and properties or plans to build roads nearby.

There are also other search fees and disbursements including index map, commons, the local authority, land charge, company searches and bank transfer fees.

If you’re buying a property, the chances are that you’re also selling one, for which your estate agent will charge you. Estate Agent Commission is usually between 1% and 2 % of the property price. If you are selling privately, you must take into account advertising costs.

Searching for a property can be an expensive business, particularly if you’re moving out the area. You should allow funds for accommodation, eating out, travel, telephone calls. You must also consider whether you’ll need time off work.

Removal costs can be variable and you should obtain at least three different quotes being making a choice. You could do the removal yourself but this is time-consuming, not to mention stressful. If you decide to do it yourself, then you must allow for the cost of hiring a van or lorry, additional insurance and petrol.

The Mortgage Indemnity Guarantee (MIG) fee is an insurance premium charged by some mortgage lenders where your loan amount is over 75% (this may vary with lenders) of the property price. This is charged in the event that you default on your mortgage repayments and the lender is unable to recover its money. Please note, that this only protects the lender and not you.

There are also a number of other possible costs to consider, so it’s a good idea to put aside a contingency fund.

	Buildings insurance premiums
	Contents insurance premiums
	Additional removal insurance
	Disconnection of services (water, gas, electricity, telephone etc)
	Reconnection of services
	Installation of new equipment
	Carpet (including installation)
	Kennelling of pets
	Mail redirection
	Change of address notice