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Understanding the costs involved in buying a UK property

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The UK property market is considered to be one of the world’s best for several reasons. Whether it’s a robust economy with a GDP valued at close to £3.5 trillion or a resilient property market that has consistently grown and delivered prosperous returns even during economic downtrends, investors are always looking for attractive deals. Many property buyers, both domestic and overseas, plan their UK investment for months if not years. At such times, they must understand all the costs over and above the property’s listed price.

Buying a UK property

To make the property buying process transparent and easy, we have put together all the costs you need to understand before making the big purchase.

Legal and conveyancing costs

Legal and conveyancing costs

Property purchases in the UK can vary from a few hundred thousand to millions of pounds, depending on its type, size and location. A licensed conveyancer or solicitor plays a crucial part in property transactions, as they take responsibility for legally transferring property rights from the seller to the buyer. The conveyancing cost is further divided into two parts. This includes the conveyancer’s fee, which is the cost of their time and expertise devoted to processing the transfer and the disbursements, which they need to pay third parties on your behalf.

Conveyancer Fee

A reputed conveyancer like the ones we usually work with will charge a fixed fee depending on the property, and they will disclose their complete service charge upfront to uphold transparency and fairness. Many conveyancers offering a better-than-market price may have other hidden costs added to the total later. So be careful!

Disbursements

These are the costs incurred in getting the paperwork in order. Remember, the conveyancing process for buying a property requires more paperwork than selling. Therefore, the cost is also higher for the buyer than for the seller. These include (but are not limited to) anti-money laundering checks, purchase of property documents from HM Land Registry, transfer fees, mortgage supplement fees and stamp duty arrangement fees.

A thorough conveyancing process protects all the legal interests of the buyer, resulting in successful and hassle-free property ownership.

Types of surveys and charges

Types of surveys and charges

While they aren’t mandatory, surveys can reveal important information, including potential issues about a property’s physical condition and structural quality that could affect its resale value. Based on property type and depth of survey, buyers may need to spend anything between £200 to £1,500.

Basic valuation survey

Usually requested by mortgage lenders, this is a basic survey that ensures the agreed purchase price matches the property’s market value. It can cost between £200 to £400.

Homebuyer’s report

More detailed than a basic valuation, a homebuyer’s report will evaluate the property’s overall condition. Even though it’s the most popular type of survey, it doesn’t delve into what’s behind the walls or under the floorboards. It can cost anything between £400 to £800.

Building / structural survey

This is the most in-depth and comprehensive property survey, suitable for older properties, which may require extensive repairs and upgrades. The cost for such detailed surveys can be more than £1,000.

Stamp Duty Land Tax (SDLT)

Stamp Duty

Depending on whether you’re a first-time buyer or an avid investor, property investments in the UK are subject to taxation. Based on the purchase criteria, you can now calculate the exact SDLT payable on your property using our free SD Calculator.

Here’s a simplified breakdown of the stamp duty rates in England and Northern Ireland:

Price of property Stamp duty rate (first-time) Stamp duty rate (additional)
Up to £250,000 0% 3%
£250,001 to £925,000 5% 8%
£925,001 to £1.5 million 10% 13%
Over £1.5 million 12% 15%

Remember, additional complexities like second homes or buying into a buy-to-let property attract higher rates.

Furnishing and dressing costs

Furnishing and dressing costs

With attractive rental yields of up to 6%, properties in London are an attractive bet for investors looking to generate steady income from their investments. Our sister company, InStyle Direct, take care of all furniture and decorative needs for a successful tenancy and landlord experience.

Depending on the size of your property and its dressing needs, we provide furniture solutions that help maximise rental incomes by realising the true potential of your property. Starting from £4,000, our furniture packs come in a wide range of customisable options, and they are trusted by landlords, developers and investors who want to make the most of their investments.

While all the costs of buying a property in the UK may seem daunting, they are essential investments in securing a sound and potentially lucrative asset. Understanding and budgeting for these costs, from legal fees to stamp duty and furnishing expenses, will help you navigate the property market with confidence and ensure a profitable investment.

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About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents.  With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 15 international offices.

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