What Are the Extra Costs When Buying Your First Home? (UK First-Time Buyer Guide)

Many first-time buyers focus on saving a deposit when planning to buy a home.

However, the deposit is not the only cost involved in purchasing a property.

There are several additional costs that buyers should be aware of during the home-buying process. Understanding these early can help you budget properly and avoid surprises later on.

This guide explains the most common extra costs first-time buyers may face when buying a home in the UK.

⚠️ This article is for general information only and does not constitute mortgage advice. Mortgage eligibility depends on individual circumstances and lender criteria can change.

Mortgage arrangement fees

Some mortgage products come with an arrangement fee, sometimes called a product fee.

This is a fee charged by the lender for setting up the mortgage.

Arrangement fees can vary but are commonly around:

• £0
• £495
• £999
• £1,499 or more

In some cases the fee can be paid upfront or added to the mortgage balance.

However, adding it to the mortgage means interest will be charged on the fee over the life of the loan.

A mortgage adviser can help compare whether a lower interest rate with a fee or a slightly higher rate without a fee works out cheaper overall.

Solicitor or conveyancing fees

A solicitor or conveyancer handles the legal side of buying the property, known as conveyancing.

Their work includes:

• Property searches
• Reviewing contracts
• Checking the legal ownership of the property
• Handling the transfer of funds

Typical conveyancing costs for first-time buyers are often between:

• £900 – £1,500, depending on the property and the solicitor used.

There may also be additional disbursement costs, which are payments the solicitor makes to third parties during the process, such as:

• Search fees
• Land Registry fees
• Identity verification checks

Property searches

Property searches are checks carried out by your solicitor with local authorities and other organisations.

These searches help identify potential issues with the property.

Common searches include:

• Local authority search
• Environmental search
• Water and drainage search

Search costs typically range from £250 to £400, depending on the location.

Property surveys

While the lender will carry out a mortgage valuation, this is primarily to confirm the property is suitable security for the mortgage.

Many buyers choose to arrange their own property survey for a more detailed inspection of the property’s condition.

Common survey options include:

• Level 1 Condition Report – basic overview
• Level 2 Homebuyer Report – more detailed inspection
• Level 3 Building Survey – comprehensive structural report

Survey costs can range from approximately £400 to £1,000+, depending on the property type and survey level chosen.

Mortgage valuation fee

Some lenders charge a valuation fee for assessing the property.

This confirms the property's value for lending purposes.

Some lenders include the valuation free as part of the mortgage product, while others may charge a fee depending on the property value.

Stamp Duty Land Tax (England)

Stamp Duty Land Tax is a tax paid when purchasing property in England.

First-time buyers currently receive a higher tax-free threshold, meaning many first-time buyers will pay no Stamp Duty, depending on the purchase price.

However, this depends on:

• The property value
• Government thresholds at the time of purchase

Because Stamp Duty rules can change, buyers should always check the current thresholds before budgeting.

Land Transaction Tax (Wales)

If you are buying property in Wales, Stamp Duty does not apply.

Instead, buyers pay Land Transaction Tax (LTT).

Unlike England, Wales currently does not offer a specific first-time buyer tax relief, which means the same tax rules apply whether you are a first-time buyer or an existing homeowner.

However, LTT has different tax thresholds, and many lower-priced properties may still fall below the level where tax becomes payable.

Your solicitor or mortgage adviser can help confirm whether Land Transaction Tax will apply to your purchase.

Moving costs

Moving costs can vary depending on how you choose to move your belongings.

Options include:

• Hiring a removal company
• Renting a van and moving yourself
• Packing services

Removal costs can range widely depending on distance and the amount being moved.

Buildings and contents insurance

Mortgage lenders require buildings insurance to be in place from the point of exchange of contracts.

This insurance covers the structure of the property, including things such as the walls, roof and permanent fixtures.

Many buyers also choose to arrange contents insurance to protect their belongings.

The cost of insurance depends on the property, location, and level of cover chosen.

Personal protection

When buying a home, many buyers also consider personal protection policies to help protect their home and finances.

These policies are designed to help protect you and your family financially if something unexpected happens, such as illness, injury, or loss of income.

During these conversations, advisers may ask questions such as:

• What would you want to happen to the home if you passed away?
• How would your life look like if you lost your income?
• What financial security would you want for your family?

Protection advice should always be tailored to your individual circumstances and considered alongside your mortgage planning.

Other potential costs to consider

Some buyers may also encounter additional costs such as:

• Mortgage broker fees (if applicable)
• Specialist reports (for example damp or structural reports)
• Furniture or appliances for the new home
• Initial repair or decorating costs

These costs vary depending on the property and the buyer’s circumstances.

Final thoughts

While saving a deposit is one of the biggest steps towards buying your first home, it is important to plan for the additional costs involved in the purchase process.

Understanding these costs early can help you budget properly and avoid delays once you begin your home-buying journey.

This article provides general information only. Mortgage eligibility and suitability depend on individual circumstances and lender criteria can change. A mortgage adviser can help explain the full costs involved when buying a property.

Based in Brecon, Powys, I support first-time buyers locally and across the UK with clear, jargon-free mortgage advice tailored to their individual circumstances.