Hidden costs of buying a home are leaving people thousands of pounds out of pocket – how to make sure you're not stung
HOMEOWNERS are being stung by hidden property costs that often leave them thousands of pounds out of pocket.
Almost 40% of recent home buyers said that their move had cost more than they budgeted for, including Lillie Lockyer, who faced a bill of £3,500 for faulty wiring in her new home.
As UK buyers rush to take advantage of chancellor Rishi Sunak's Stamp Duty holiday, experts are warning that failing to thoroughly check your dream property could cost you serious money.
This is more important than ever, as pent up demand – as well as the new savings on Stamp Duty – has started to push up the cost of houses.
Research from property agents Zoopla found that almost four in ten recent home buyers had been stung by hidden costs.
Quite often these costs are associated with issues that could have been checked in advance, such as faulty boilers or electrics.
Worryingly, 29% said these additional costs were attributed to standard transactional services such as surveyors and conveyancers.
How to avoid being stung by hidden property charges
Zoopla’s consumer expert, Tom Parker, shares his top tips for avoiding hidden property fees
- Conduct the most thorough survey you can afford, particularly if your property is old or is in an area with a history of subsidence. Catching a problem early can save you thousands later on.
- Shop around for services like removals and legal advice. You’ll be amazed how much prices can vary.
- Check with the people you are buying from whether they will be willing to sell you any furniture you like the look of. They might be willing to sell it cheap. Also before buying furniture make sure you measure up, you don’t want to spend money on big ticket items you can’t actually use!
Of those buyers hit by unexpected costs, 44% said they had to pay more than £500, 30% more than £1,000 – while 15% of home movers were stung by more than £1,500.
Lillie Lockyer is one home buyer who had to find £3,500 when an unexpected issue cropped up with her new home.
The 25-year old, who works in a accounts department in London, has just purchased her first home with her partner Steven in Headcorn, Kent.
With a budget of £320,000 to purchase their home, the couple encountered some hidden costs after an electrical survey flagged that the property needed to be completely rewired.
Lillie said: “As the property had been rented before we purchased it, there were no initial red flags. However, a condition of the sale was that we had to get an electrical survey done.
"Unfortunately, the survey came back two days before we exchanged with information that the property had to be completely rewired.
“We had a lot of money on the line as had already paid our solicitor’s fee and deposit, meaning we really couldn’t back out of the sale.
"It was an incredibly stressful experience as we were initially quoted a cost of £10,000 to sort out the electrics in the house. Thankfully, we managed to find a cheaper quote for £3,500 which the seller has agreed to pay for.
"However, we will have to cover the cost of the plastering in the house once the rewire has been complete. It also meant we had to delay our move by a week until the electrics have been fixed."
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan – The Government will lend you up to 20% of the home's value – or 40% in London – after you've put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you're restricted to specific ones.
"First dibs" in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20% discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.
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