What Are the Fees When Buying a House in the UK?

Buying a house in the UK involves navigating a range of financial obligations beyond the property’s sticker price. Understanding these various fees is important for anyone looking to purchase a home, as they can significantly influence the overall budget. From initial assessments to legal requirements and moving day logistics, each stage of the buying process carries its own set of costs that prospective homeowners should anticipate.

Initial Property and Mortgage Assessment Costs

The journey to homeownership often begins with costs related to assessing the property and arranging financing. One such expense is the mortgage arrangement fee, sometimes called a product fee, which lenders charge to set up your mortgage. These fees can range from £500 to £2,000, and they can either be paid upfront or added to the total loan amount. Adding the fee to the loan means paying interest on it over the mortgage term.

Alongside the arrangement fee, a mortgage valuation fee is typically required. This fee covers the lender’s basic assessment of the property’s value to ensure it provides sufficient security for the loan. It generally costs between £250 and £1,500. This valuation is distinct from a more comprehensive survey for the buyer’s benefit.

Buyers often opt for an independent property survey to uncover potential issues before committing to the purchase. A Royal Institution of Chartered Surveyors (RICS) HomeBuyer Report (Level 2) is a common choice for properties in reasonable condition, typically costing between £350 and £1,000. For older, larger, or more complex properties, a RICS Building Survey (Level 3) offers a more detailed analysis of the property’s structure and condition, with costs ranging from £400 to over £1,500.

If a mortgage broker assists in finding a suitable loan, they may also charge a fee for their services. While some brokers are paid commission by lenders, others charge a direct fee to the client, which can range from £0 to £500 on average, or be a percentage of the loan amount. These fees are separate from any charges levied by the mortgage lender.

Legal and Tax Obligations During Purchase

The legal transfer of property ownership in the UK involves significant fees and taxes, making this one of the most substantial financial considerations. Conveyancing solicitor fees cover the professional services for handling the legal aspects of the transaction, including drafting contracts, conducting searches, and managing funds. Average fees for a freehold property purchase typically range from £1,190 to £1,256, but can vary depending on the property type, value, and complexity, with leasehold properties generally incurring higher costs due to additional legal work.

In addition to the solicitor’s professional fees, buyers are responsible for conveyancing disbursements, which are third-party costs paid by the solicitor on the buyer’s behalf. These include various property searches designed to reveal important information about the land and any potential issues, such as local authority searches, environmental searches, and water and drainage searches. The cost for a package of these essential searches typically falls between £200 and £500.

Another mandatory disbursement is the Land Registry fee, paid to HM Land Registry to officially register the new ownership of the property. This fee is calculated based on the property’s value and can range from £20 to £830. Small bank transfer fees, usually between £20 and £50, are also incurred for moving large sums of money, such as the deposit and the final purchase funds.

The largest single tax when buying property in England and Northern Ireland is Stamp Duty Land Tax (SDLT). This progressive tax is applied to increasing portions of the property price. For residential properties, the standard rates from April 1, 2025, are:

0% on the portion up to £125,000
2% on the portion from £125,001 to £250,000
5% on the portion from £250,001 to £925,000
10% on the portion from £925,001 to £1.5 million
12% on any amount over £1.5 million

First-time buyers in England and Northern Ireland may qualify for relief, reducing their SDLT liability. From April 1, 2025, first-time buyers pay no SDLT on properties up to £300,000. For properties between £300,001 and £500,000, a 5% rate applies to the portion above £300,000. If the property price exceeds £500,000, first-time buyer relief is not available, and standard SDLT rates apply.

Higher rates of SDLT apply if purchasing an additional residential property, such as a second home or a buy-to-let property. This usually involves an additional 5% surcharge on top of the standard SDLT rates. Non-UK residents purchasing residential property in England or Northern Ireland are subject to a further 2% surcharge on top of all other applicable SDLT rates for properties costing more than £40,000 if they have not been present in the UK for at least 183 days during the 12 months preceding the purchase. SDLT is paid by the solicitor on behalf of the buyer at the point of completion.

Moving and Immediate Post-Purchase Expenses

Beyond the direct costs of the property transaction, buyers should budget for expenses associated with moving and settling into their new home. Removal costs for transporting belongings can vary significantly based on the volume of items, the distance of the move, and whether professional packing services are utilized. For a three-bedroom house, average removal costs in the UK are around £928, but can range from approximately £409 to over £4,000 depending on property size and services.

Buildings insurance is an important expense that must be in place when buying a home with a mortgage. Mortgage lenders almost always mandate that buildings insurance is active from the exchange of contracts, the point at which the buyer becomes legally committed to the purchase. This insurance protects the property’s structure against damage from events such as fire, floods, or storms. Contents insurance, which covers personal belongings, is optional but highly recommended to protect against theft or damage to movable items.

Upon moving in, there are often utility connection or setup fees for establishing new accounts for services like electricity, gas, water, and internet. These are typically small administrative charges. It is also advisable to allocate a budget for immediate maintenance or renovation. Setting aside funds for necessary repairs, decorating, or minor alterations can prevent unexpected financial strain shortly after moving.