If you are moving house, you need to know how much the full costs of buying and selling are likely to be. We look at the expenses that you will incur alongside the basic solicitors’ costs for conveyancing and what these charges are for.
The charges for the legal work aspect will depend on a range of issues, including issues such as whether you are buying a newbuild home, a leasehold property or you will be entering into a shared ownership agreement. In addition to the legal costs, you will generally need to pay the following expenses:
Buying a property
Stamp Duty Land Tax
Stamp Duty is payable on the portion of the price paid for a property over £250,000. The percentage you will pay depends on the purchase price of the property.
Property or lease premium or transfer value SDLT rate
Up to £250,000 zero
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
If it is not your only property but is a second or subsequent one, you will need to pay an extra 3%.
First time buyers
If you and any co-purchaser are first time buyers, ie. this is the first property that either of you has ever bought and the property costs no more than £625,000, you will usually be eligible for a discount. You will pay a reduced rate as follows:
For a property costing up to £425,000 – no Stamp Duty is payable.
For properties costing more than this, Stamp Duty of 5% is payable on the portion from £425,001 to £625,000.
Survey fees
You will usually need to have a survey carried out when you buy a property. A lender’s valuation is generally only a cursory examination of the property to ensure that it is adequate security for their loan. A survey will give you more details about the condition, any areas of concern and the likely repairs and maintenance that will be needed in the foreseeable future.
The costs vary widely depending on the level of detail you need. For an older property, one in poor condition or if you intend to make extensive alterations or additions, you may be advised to have a full structural survey carried out to make sure you have all of the information you need and that there are no nasty surprises.
If you are buying a modern home in good condition and of a usual design and construction, a homebuyer report may be sufficient.
Members of the Royal Institution of Chartered Surveyors (RICS) provide three categories of survey. RICS states that these cost from a few hundred pounds for a basic Level 1 home survey to over £1,000 for a Level 3 survey.
Mortgage fees
Your new lender will have a range of costs and you may also need to pay a broker’s mortgage arrangement fee if you use one. Lenders also charge their own arrangement fee, which can be between £1,000 and £2,500. This can sometimes be added to the loan.
The lender will often charge you for their valuation, which is generally £300 upwards.
Search fees
You will generally need a local search as well as replies to drainage enquiries. The costs will depend on the local authority or drainage company in question. Local searches can be between £100 and £300. Drainage enquiries are generally between £40 and £60.
Electronic money transfer fees
There is a cost to transfer money electronically, including from your lender and between solicitors. This is usually around £40 plus VAT.
HM Land Registry fee
The Land Registry makes a charge for registering a purchase which starts at £45. For properties costing between £100,001 and £200,000, the fee is £230 and for properties between £200,001 and £500,000, the fee is £330. A reduction is available if your solicitor uses the Land Registry’s portal.
Selling a property
Estate agent’s fees
The main cost on a sale is generally the estate agent’s fee. Agents often charge a percentage of the sale price, typically starting at 1%, although some may offer a fixed fee.
Mortgage lender’s redemption costs
When you redeem an existing mortgage, your lender will include a range of expenses in the redemption figure. These can include an administration fee and an exit charge. If you are redeeming the mortgage early, during a fixed-rate period, you will usually be charged a substantial penalty.
Electronic money transfer fees
Again, there will be cost of around £40 plus VAT to send money electronically, including when sending money to redeem your mortgage and when sending the balance of sale money to you.
Contact us
If you would like to speak to one of our expert property lawyers, ring us on 0333 3055 189 or email us at info@lpropertylawyers.co.uk
