Five hidden costs of buying a home


So, you’re thinking of buying a house or flat – congratulations! You will, of course, be searching ASPC for your dream property, probably using the myASPC function to keep track of your favourites. While you should look at properties slightly over your budget, in case you may find a “bargain”, beware of thinking a mortgage is your only cost.

We take a look at five costs of buying a property you need to budget for. Be aware, also, there may be other potential costs that may, exceptionally, arise but we shall look at the more routine costs.

 

1: Solicitor’s fees

A good solicitor will make the buying process as easy as possible for you - helping you all the way from deciding your priorities, assessing the market – is it a buyer’s or a seller’s market -  what will your budget stretch to in the local market,  which lenders are good at delivering paperwork and funds on time and which are not – believe me, they all talk the talk, but some are very poor at delivery – helping you to negotiate the best possible price for the house or flat you like, negotiating with the seller’s solicitor if trying to obtain the best deal, then dealing with the contractual paperwork, the process of legally transferring the title to the property to you in a valid effective way, on time, dealing with the mortgage lender’s requirements and effecting their security over the property, dealing with the preparation and submission of your title documents and the security document for your lender to the Land Register, preparing and submitting the Land and Buildings Transaction Tax return on your behalf and generally looking after and resolving any issues that arise.

There are no fixed fees for the legal work and solicitors are bound by Law Society of Scotland rules to advise clients, early in the process, by way of an engagement letter, to specify (amongst other things) the fees that will be charged.  Do be careful to balance cost against service. Some firms offer a cheap and cheerful service, others provide a more personal approach with your solicitor carrying out all the process for you, rather than delegating. There will also be outlays included in the overall account rendered by your solicitor. These are payments made to third party organisations, such as the Land Register of Scotland to register the disposition and Standard Security. Based on the value of the property being transferred there is a sliding scale. For example, a purchase price of £200,000 will incur Land Register fees of £420.

Take a look at our buying a house series of guides to discover more about the full buying process and how your solicitor can help.

 

 

2: LBBT

Formerly Stamp duty, Land and Buildings Transaction Tax (LBBT) was introduced in April 2015, and is a tax on those buying property, with more expensive properties bearing greater amounts of tax.

For properties under £145,000, you will not have to pay any tax – which is great for first time buyers or those downsizing.

The Scottish Revenue website has a useful calculator – visit www.revenue.scot

 

3: Deposit

This is the amount of the price you have to pay from your own resources.  Do bear in mind that the percentage of loan applies to the lower of either the price paid or the mortgage valuation accepted by the lender. The deposit must not be financed, strictly speaking, by another form of borrowing –a personal loan, for example. It is not unknown, however, for the bank of Mum and Dad to “gift” money to help with a deposit.

 

4: Moving costs

Unless you are lucky enough to have family or friends with a van who will help you move in for free, you will also have the additional cost of hiring a moving company.

The costs are normally higher for this on Saturdays, while Monday and Friday are normally also more expensive, as people try to take off a day at the start or end of a weekend.

It’s a good idea to call around several local moving companies – and ask friends for recommendations from when they moved – and see what dates work best. If your moving days is, say, a Wednesday, you might find this cheaper overall.

Remember, if you cancel your moving company close to the day, you will probably have to pay a deposit – something to keep in mind if your moving date is not yet fully set in stone.

 

5: Insurance

We hope that nothing bad happens to your new property - but it is best to be prepared!

Home insurance and contents insurance will make sure that both the property itself and all your belongings will be safe. A mortgage lender will make it a condition of your mortgage that you have house cover, but will not insist on contents cover.

If you already have insurance, you might be able to exchange it to cover your new property – remember that from the minute you exchange contracts you take legal responsibility for any damage in the home.

Comments

+ View more comments

Join the conversation.

Please correct the following:

Your comment has been submitted. Once it has been approved it will appear on the website.
To help prevent spam comments, please click the above checkbox to confirm you are a genuine commenter.

Oops...it seems that we don't have the details we need from you to comment on posts, please can you add them below. These details will be saved to your myASPC account




Related Posts

Liked this article? We think you will find these interesting too:

Five things to do in and around Alford

August 08, 2017

In By John MacRae, Chairman of ASPC

A peaceful and idyllic countryside town in rural Aberdeenshire, tucked away from the hustle and bustle of everyday life, Alford is located south of the River Don, boasting impressive countryside walks, two museums, a historic battlefield, a golf course and a fantastic caravan and camping site. With a small population of 2,290, the tranquil setting is only a 40-minute drive from the centre of Aberdeen.

Read article

Aberdeen housing market begins recovery

May 11, 2017

In By John MacRae, Chairman of ASPC

The first quarter figures for the Aberdeen housing market in 2017 have continued to show the effect of the background economic situation on our local housing market. However, there are some indications that the market is about to commence a slow recovery.

Read article

Aberdeen City Council freezes council tax for another year

February 23, 2017

In By John MacRae, Chairman of ASPC

A freeze in council tax was announced in Aberdeen City Council’s budget on 22 February, with Councillor Ian Yuill stating “People in bands E to H will already be hammered by an increase.”

Read article

ASPC celebrates 48 years – how the property market has changed

February 14, 2017

In By John MacRae, Chairman of ASPC

Back in the late 1960s, life was different – and so was finding your dream home. Now we have the internet and apps to provide us with details of new properties that fit our specifications, but back in the 60s, a lot of legwork was involved.

Read article

Questions to ask your solicitor when selling a property

February 08, 2017

In By John MacRae, Chairman of ASPC

Selling your property can be stressful, but the right solicitor should be able to help ease any issues. We take a look at what you should ask your solicitor when you first discuss selling.

Read article

What property can you get for £200,000 in Aberdeen?

November 15, 2016

In By John MacRae, Chairman of ASPC

So you’ve got a leg up on the property ladder, you’re moving out of your starter home and looking for something a little more luxurious. £200,000 can go far in some cities; here in Aberdeenshire, whether it’s a city pad, a family home in the suburbs or something a little more unusual, you’re sure to find the best value for your money.

Read article

Volume of sales in Aberdeen up 2.7% in Q3

November 01, 2016

In By John MacRae, Chairman of ASPC

The sales volume of detached houses in Aberdeen increased by 6.7% in quarter 3 of 2016, according to a report from Aberdeen Solicitors’ Property Centre (ASPC) in conjunction with the Centre for Real Estate Research, University of Aberdeen.

Read article

Five things to ask when viewing a show home

October 25, 2016

In By John MacRae, Chairman of ASPC

Show homes can be stunning; a unique glimpse of what your future could look like if you choose to cosy on up and buy yourself a new build property. New build properties have many advantages: for many buyers being the first to live in the property is highly attractive, repairs and redecoration costs should also be minimal over the first few years, and you can also often select your fixtures and fittings prior to moving in so the property is finished to your tastes.

Read article

Is Scotland’s housing economy relying on the Bank of Mum and Dad?

September 22, 2016

In By John MacRae, Chairman of ASPC

Over half a billion pounds is loaned out by the Bank of Mum and Dad in Scotland, according to Bank of Scotland’s latest How Scotland Lives research.

Read article

Five things to do in and around Stonehaven

August 16, 2016

In By John MacRae, Chairman of ASPC

The coastal town of Stonehaven has settlements dating all the way back to the Bronze Age, although development of the ‘new Stonehaven’ didn’t begin until 1759.

Read article

10 ways to entertain the family in and around Aberdeen over the summer holidays

July 20, 2016

In By John MacRae, Chairman of ASPC

The summer holidays are upon us, and that means months of trying to entertain your little darlings.

Read article

How to spend the day in St Cyrus: The top 5 attractions

June 22, 2016

In By John MacRae, Chairman of ASPC

The village of St Cyrus is one of Scotland’s best kept secrets, tucked away in southeast Aberdeenshire. Situated on the North Sea Coast between the small villages of Morphie and Johnshaven, and just six miles north of Montrose, this location is very much sought after by daydreaming homeowners and holidaymakers alike

Read article

What could the EU referendum mean for house prices?

June 08, 2016

In By John MacRae, Chairman of ASPC

The EU referendum has been a seemingly unavoidable topic for several months, and now that we are in the final weeks (thank goodness) of the campaigning before the 23rd June vote, ennui is racking up

Read article

How to Spend a Day in Portsoy: The 5 Top Attractions

May 18, 2016

In By John MacRae, Chairman of ASPC

Travel along the Moray coast to discover the charming harbour town of Portsoy, Banffshire. This quiet town situated between Cullen and Banff is ideal for escaping the hustle and bustle of everyday life. Whether you’re just passing through on a tour of the Moray coast, or you’re planning a rejuvenating costal break, make the most of your trip with our round-up of Portsoy attractions.

Read article

The Scottish Council Tax changes – will you be affected?

March 16, 2016

In By John MacRae, Chairman of ASPC

It is almost ten years that the council tax freeze has been in place, but that is set to change next April, according to plans recently revealed by Nicola Sturgeon

Read article

Buying a house in Scotland - Part Three: Making an offer

December 23, 2015

In By John MacRae, Chairman of ASPC

So, you have found a house you really like, your funding is in place and you and your solicitor have taken steps to sound out the seller. You will find yourself in one of two situations, broadly speaking: either the seller is in the fortunate position of having more than one party wanting to buy, or you are the only interested party.

Read article

ASPC looks into the Aberdeen Art Gallery redevelopment

December 09, 2015

In By John MacRae, Chairman of ASPC

I had the opportunity, recently, of further updating on the redevelopment of the Aberdeen Art Gallery. Work has been ongoing for some time now, but not necessarily apparent to the passing public as most of what has been done has been carried out behind closed doors. During this year staff and contractors have been very busy packing and transporting the art collection to secure storage. Over 2,000 items had to be dealt with and now rest in safe temperature controlled storage.

Read article

Changes to the Aberdeen Art Gallery: what will they mean?

November 04, 2015

In By John MacRae, Chairman of ASPC

Over the next few months, those who walk past the Aberdeen Art Gallery will notice the erection of scaffolding to the front of the building, the removal of the roof above the centre court and the installation of a crane. This isn’t the latest art display: it’s the next stage in the £30m redevelopment plan for the Gallery.

Read article

Could King’s Gate roundabout be replaced with traffic lights?

October 14, 2015

In By John MacRae, Chairman of ASPC

It’s been a big year for the roads in the North East of Scotland, and Aberdeen in particular. First, we have the £745m Aberdeen Western Peripheral Route/Balmedie-Tipperty bypass, then plans to improve the Haudagain Roundabout route…and now it has been suggested that the Anderson Drive roundabout at King’s Gate could be the next target. (“Target” seems an appropriate word in this case. I have to declare an interest, here, as I use both in my commute.)

Read article

Buying a House in Scotland Part One: Preparations

October 07, 2015

In By John MacRae, Chairman of ASPC

While ASPC is apparently concerned with marketing properties for sale in the most effective way, one can tend to forget that it was originally set up to help prospective buyers.

Read article

Scottish Government to spend £195m to help home buyers get on property market

September 16, 2015

In By John MacRae, Chairman of ASPC

The successor to the current Help to Buy scheme from the Scottish Government has been announced, with the government to spend £195m over the next three years in a new shared equity scheme to help around 6,500 home buyers buy a new-build home. There are terms and conditions attaching such that not all first time purchasers will qualify. Equally only registered builders will come within the scheme and affordable housing is the target for the funding.

Read article

What you should look for when renting a property

August 20, 2015

In By John MacRae, Chairman of ASPC

Whether it’s the first property you’re renting, or you’re an old hand at the renting game, it can still be difficult to find the perfect property.

Read article

What effect has the LBTT had on house prices in Scotland?

July 15, 2015

In By John MacRae, Chairman of ASPC

It’s now been just over three months since the Land and Building Transaction Tax (LBTT) replaced Stamp Duty in Scotland – but what has this meant for the housing market?

Read article

Will Scotland’s housing and infrastructure planning change in the next year?

July 01, 2015

In By John MacRae, Chairman of ASPC

Is the time right to advance Scotland’s infrastructure and housing planning system?

Read article
Back to all Articles