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Buying a house? All you need to know about the costs involved
Knowing about the costs involved when buying a house can help ensure you stick to a budget. Picture: Getty Images - Credit: Getty Images/iStockphoto
Melissa Richards from Spire Solicitors details all the costs involved when buying a house.
When purchasing a property, it is important to understand all the costs involved to ensure you can budget correctly. Along with the legal fees, there are a number of extra costs and disbursements to consider.
To help people understand and compare costs, in December 2018 the Solicitors Regulation Authority introduced new price transparency rules. Law firms are now required to publish conveyancing prices and service information in a clear and easy to understand format. These prices should include:
• Legal fees
This is the price you will pay for legal services and they are based on a scale depending on the value of the property you are purchasing.
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In certain circumstances it will be necessary to add a supplement to these costs to cover any additional work required, for example if you are buying a leasehold or new build property or are purchasing with Help to Buy assistance, as these matters involve more complex issues and lots more paperwork.
• Disbursements
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This is money which your lawyer has to pay to third parties during your purchase. For example, search fees and Land Registry fees. You will be asked to pay a sum on account at the start of your transaction to enable your lawyer to obtain these on your behalf.
• Bank fees
Whenever monies are sent electronically – whether it be to your lender to pay off your mortgage, sending purchase monies to the seller's solicitor or sending a balance to you on completion – a bank fee will be charged. Monies can either be sent by CHAPs which is a same day transfer, or by BACS which can take 3-5 working days to be received.
• SDLT
Stamp Duty Land Tax is likely to be payable and is based primarily on the purchase price of the property but there are other factors to consider such as whether the property will be a second home, or if you are a first-time buyer. Once the specifics of your transaction are known, you will be provided with the actual amount which will be payable.
Spire Solicitors LLP has published a helpful price guide which can be found on our website which clearly sets out what costs you can expect to pay for your transaction.
If you would like to discuss any points in this article further, please contact Spire Solicitors LLP on 01603 677077 for all your legal needs.
This column is sponsored by Spire Solicitors.
