Buying your first home is an exciting milestone, but it can also feel overwhelming. There are many costs and considerations beyond the purchase price that first-time buyers need to be aware of. To help you navigate the process smoothly, we’ve put together a guide on what to budget for and key things to consider before making one of the biggest financial commitments of your life.
1. Saving for a Deposit
Your deposit is one of the most significant upfront costs when buying a property. Most lenders require a minimum deposit of 5-10% of the property’s value, though putting down a larger deposit (such as 15-20%) can help you secure better mortgage rates.
If you’re struggling to save, consider schemes like the Lifetime ISA (LISA), which provides a government bonus of 25% on savings up to £4,000 per year, helping first-time buyers boost their deposit faster.
2. Mortgage Costs
Once you have your deposit, you will need a mortgage to cover the remaining cost of your home. It’s essential to research different mortgage deals and speak to a mortgage broker who can help find the best option for your financial situation. When budgeting for your mortgage, consider:
- Monthly repayments – These will depend on your loan amount, interest rate, and mortgage term.
- Arrangement fees – Some lenders charge fees for setting up your mortgage, which can range from a few hundred to a few thousand pounds.
- Valuation fees – Your lender may charge for valuing the property before approving your mortgage.
3. Stamp Duty Land Tax (SDLT)
As of April 2025, changes to Stamp Duty Land Tax (SDLT) for first-time buyers in England have now come into effect. The higher temporary thresholds introduced in 2022 have ended, meaning buyers now face increased costs when purchasing property. This means:
- No SDLT is due on the first £300,000.
- A 5% SDLT rate applies to the portion between £300,000 and £500,000.
- If the property is over £500,000, standard SDLT rates apply on the entire purchase price.
For many first-time buyers, this change means higher upfront costs, particularly in areas where property prices commonly exceed the new £300,000 threshold. So, for those still on the property ladder, it’s now more important than ever to budget carefully for these additional costs.
4. Legal Fees and Conveyancing
You will need a solicitor or conveyancer to handle the legal aspects of your purchase, including property searches, contracts, and transferring ownership. Costs depend on the complexity of the transaction and purchase price.
At Howard & Over, we provide expert conveyancing services, ensuring first-time buyers experience a smooth property purchase. Our conveyancing fees start at £900, with transparent pricing and no hidden costs. Additional fees may apply for services such as Land Registry applications, indemnity insurance, and mortgage redemptions, ensuring you receive a comprehensive service tailored to your needs – get your quote today.
5. Surveys and Property Checks
A property survey helps identify any structural issues before you commit to the purchase. There are different types of surveys:
- Basic valuation – Often required by mortgage lenders but may not highlight issues.
- Homebuyer’s report – A mid-range survey that checks for major issues.
- Full structural survey – A comprehensive check, recommended for older or unusual properties.
Survey costs vary, but they can save first-time buyers from unexpected repair costs later down the line.
6. Moving Costs
Moving to a new home comes with its own set of expenses. These costs can vary based on the size of your move and specific needs, but common expenses include removal services, storage fees and packing materials – it all adds up!
7. Home Insurance
Your mortgage provider will likely require buildings insurance, which covers the structure of your home. It’s also advisable to get contents insurance to protect your belongings. Combined policies can cost around £150-£500 per year.
8. Council Tax and Utility Bills
After moving into your new home, you will need to budget for essential ongoing costs like council tax and utility bills. These can vary based on your property’s size, location, and usage:
- Council tax – Rates vary depending on the property’s band and location.
- Gas and electricity – Costs depend on the size of the property and energy efficiency.
- Water bills – Based on usage or a fixed charge.
- TV, broadband, and phone – Shop around for the best deals.
Buying your first home is an exciting journey, but careful budgeting and planning are essential to avoid unexpected financial stress. Understanding all the associated costs and seeking professional legal advice can help ensure a smooth transaction.
At Howard & Over Solicitors, we specialise in residential property transactions and can guide first-time buyers through every step of the process. Whether you need expert conveyancing services or advice on buying your first home, we’re here to help.
Get in touch with our team today to discuss your property purchase and how we can support you through the legal process.
