First Time Buyer Guide

The real cost of buying and owning

The deposit may be the largest upfront cost, but it is not the only money a purchase will absorb. Tax, professional work, moving, immediate repairs and the first bills of ownership all need room in the same budget.

The four parts of the purchase budget

Purchase money is your deposit and any property transaction tax. Transaction costs include the mortgage, legal work, searches and survey. Moving costs include removals, overlap, initial insurance and making the home usable. Reserves cover what happens after the keys.

Keep a live budget with a quote or evidence beside every line. “About £2,000 for everything else” stops being useful once three separate professionals ask for money.

Property tax depends on the country and buyer

In England, Stamp Duty Land Tax applies in price bands. At the date this page was checked, eligible first-time buyers pay no SDLT on the first £300,000 and 5% on the portion from £300,001 to £500,000; above £500,000 the first-time-buyer relief does not apply.

Wales uses Land Transaction Tax, with its own bands and no separate first-time-buyer relief. Joint buyers, previous ownership, additional property and residence status can change the tax result. Use the official calculator and have the conveyancer confirm the amount rather than relying on a portal estimate.

Property tax is separate from the deposit and is not an extra amount added to the mortgage. You therefore need enough cash to cover it as well as the deposit and purchase costs. Your conveyancer will usually collect the money from you and submit the return and payment after completion.

For an ordinary purchase in England, the SDLT return and payment are due within 14 days of the effective transaction date, which is usually completion. In Wales, the LTT deadline is 30 days beginning on the day after the effective date. Ask the conveyancer for the confirmed amount and the date by which cleared funds must be in their client account, rather than assuming the tax can be dealt with later.

Comparing the full cost of mortgage deals

A product can include an arrangement or product fee, valuation fee, booking fee or adviser fee. Some fees can be added to the loan, but then attract mortgage interest. Compare the total cost over the initial deal period, not only the interest rate or monthly payment.

Also ask what happens if the property is unacceptable, the application is declined or the purchase fails. Refund rules differ by fee and provider.

Compare the legal fee, search package, identity and bank-transfer charges, acting-for-lender fee, tax-return work and any supplements for leasehold, new build, shared ownership, a gifted deposit or unusual title. “No move, no fee” normally has conditions and may not refund searches or other payments already made to third parties.

Ask what you would owe if the transaction ended at each broad stage. The cheapest opening quote is not cheapest if routine work appears later as extras.

Budgeting for a survey and specialist investigation

Budget for a suitable survey and some room for justified specialist investigation. Do not assume every home needs a drain survey, electrical report, boiler inspection, asbestos test and structural engineer. Use age, condition, visible evidence, intended work and the surveyor's reasoning to decide.

Which costs may be lost before exchange

If either side withdraws before exchange, legal work, searches, mortgage costs, survey and specialist reports are not normally recovered from the other party.

Home-buyer protection policies exist, but cover, qualifying events, limits, exclusions and the point at which cover must be bought vary. Read a policy as insurance, not as a promise that every failed purchase is refunded.

Additional costs for leasehold, shared ownership and new builds

A leasehold purchase can include service charge and ground-rent adjustments, notice and deed fees, compliance certificates and other administration charges. More important than the completion-day figures are the recurring service charge, reserve position and planned major works.

Shared ownership combines mortgage, rent and usually service charge. A new-build estate may have an estate charge even for freehold houses, plus reservation, options or upgrade costs. Ask for the current amounts, review mechanisms and known future spending.

Costs that begin after completion

The monthly budget changes when the home is yours, as council tax, utilities, insurance, travel, service or estate charges and maintenance all begin to compete with the mortgage. A newly decorated home can still need locks, window coverings, appliances, tools or urgent work in the first weeks.

Keep a reserve rather than assigning every remaining pound to furniture. The survey can become a staged maintenance plan: safety and active damage first, preventative work next, appearance later.

What to check for your purchase

  • Keep separate totals for the deposit, transaction fees, moving costs and the cash reserve needed after completion.
  • Use the correct official tax calculator for England or Wales, and keep the tax as cash in addition to the deposit and other purchase costs.
  • Compare mortgage products using the interest, fees, incentives and payments over the whole initial deal period.
  • Compare conveyancing quotes line by line, including what you would pay if the purchase fell through.
  • Before paying for a specialist inspection, be clear about the question it needs to answer.
  • Include every recurring property charge in the monthly budget, not only the mortgage payment.
  • Keep cash for the first repair after moving in.