First-Time Buyer? Budget For These Hidden Costs
The deposit gets all the attention. But it is rarely what catches first-time buyers off guard. It is the costs around it — before and after the keys — that do. Here is the full picture.
Three costs to budget for before you complete
1. The homebuyer survey (£400–£1,500)
A homebuyer survey — typically a RICS Level 2 or Level 3 inspection — covers structural issues, damp, and faulty electrics. Things not visible to the naked eye that can cost thousands to fix. Get one before you are legally committed.
Important: this is entirely separate from your mortgage valuation. That protects your lender, not you. Costs run from £400 to £1,500 depending on survey level and property size.
2. Conveyancing (£800–£1,500 in legal fees, plus £200–£750+ in disbursements)
Conveyancing is the legal transfer of ownership — handled by a solicitor or licensed conveyancer, and not optional. Legal fees typically run £800–£1,500, plus disbursements (searches, Land Registry) of £200–£750+. Realistic total: around £1,000–£2,000+, with leasehold properties often sitting higher. Always get at least two or three quotes.
3. The mortgage arrangement fee (£500–£2,000)
Your lender charges this for access to a specific rate. Always compare it alongside the interest rate — not separately. A lower rate with a £2,000 fee can cost you more overall than a slightly higher rate with no fee, especially on shorter terms or smaller loan amounts. Add it to your mortgage and you will pay interest on it for the life of the loan.
The ongoing costs once you are in
Getting the keys is the beginning, not the end.
Maintenance and repairs: 1–2% of property value per year
Budget 1–2% of your property’s value each year for maintenance — boiler, roof, plumbing, general wear and tear. On a £250,000 home, that is £2,500–£5,000 a year. One unexpected bill, unplanned for, can create real financial pressure. Exception: new builds come with a structural warranty (commonly called new build insurance) covering major defects for ten years.
Buildings insurance: mandatory from exchange of contracts
Buildings insurance is legally required from exchange of contracts — not completion. From exchange, the property is legally yours in the event something happens to it, even before you move in. Your lender will require it too. Do not leave this to the week before you move.
Council tax: roughly £1,000–£3,000 per year
Easy to overlook if your rent included it. Your bill depends on your property band (A–H) and local authority. Most first-time buyers can expect to pay £1,000–£3,000 a year, varying significantly by location.
Know your real affordability number before you offer
Add up the one-off costs — survey, conveyancing, arrangement fee — and factor in your first year of ongoing costs alongside the monthly mortgage. That is your real affordability figure: what it actually costs to buy and own the property, not just to get approved. Know it before you offer.
Watch Episode 4
This week’s episode covers everything above in under two minutes — clear, jargon-free, and built around the numbers that matter.
Watch Episode 4: First-Time Buyer Hidden Costs →
Missed Episode 3? We covered the most powerful force in personal finance — compound interest — and why starting earlier matters more than starting bigger.
