The hidden costs of buying your first home

Updated guide: Tepilo first published a guide on this subject in September 2017. This restored version has been fully rewritten using current UK costs and tax rules. Figures were checked on 28 August 2026.

The deposit is usually the biggest sum a first-time buyer needs, but it is not the whole buying budget. You may also need money for property tax, a solicitor or conveyancer, searches, a survey, mortgage charges, insurance, removals and work needed after you collect the keys.

MoneyHelper says buying or selling fees can exceed £5,000, excluding the deposit and Stamp Duty or Land Tax. The exact amount depends on the property, where it is, your mortgage and the services you choose.

The safest approach is to work out two figures before you make an offer:

1. The cash you need to reach completion
2. The money you want to keep back for moving, repairs and unexpected bills

First-time buyer costs at a glance

These are broad planning figures, not quotations. Some costs will not apply to every buyer.

The fee ranges above come from MoneyHelper's guide to buying and moving costs. Ask each provider for a written quotation because the final amount may be outside these ranges.

1. Your deposit is not the full cash requirement

A mortgage covers an agreed share of the purchase price. You provide the rest as the deposit. Most mortgages ask for at least 5% to 10%, although a larger deposit can widen your choice of deals and may reduce the interest rate.

For a £300,000 home:

The deposit is not a fee. It becomes part of your equity in the property. The problem comes when buyers put every available pound into it and have nothing left for the transaction or the first few months of ownership.

Before setting your maximum purchase price, deduct your likely buying costs and emergency reserve from your available savings. The amount left is your realistic deposit.

2. Property tax depends on where you buy

The UK has three different property transaction taxes:

• Stamp Duty Land Tax, or SDLT, in England and Northern Ireland
• Land and Buildings Transaction Tax, or LBTT, in Scotland
• Land Transaction Tax, or LTT, in Wales

Rates and reliefs can change. Use the relevant government calculator and ask your solicitor or conveyancer to confirm the amount for your circumstances before you exchange contracts.

England and Northern Ireland

First-time buyers can claim SDLT relief when:

• Every buyer is a first-time buyer
• The property will be their main home
• The purchase price is no more than £500,000

The first £300,000 is charged at 0%. The portion from £300,001 to £500,000 is charged at 5%.

For example, a qualifying first-time buyer purchasing for £350,000 would pay:

• 0% on the first £300,000
• 5% on the remaining £50,000
• Total SDLT: £2,500

There is no first-time buyer relief when the price is above £500,000. Standard residential rates then apply to the whole transaction. The GOV.UK first-time buyer relief guidance explains the eligibility rules and current thresholds.

Scotland

Qualifying first-time buyers in Scotland have an increased LBTT nil-rate band of £175,000, compared with the usual £145,000 residential threshold. The relief can save up to £600.

For a £250,000 purchase by a qualifying first-time buyer:

• 0% on the first £175,000
• 2% on the remaining £75,000
• Total LBTT: £1,500

Check the current bands and relief on the Revenue Scotland residential property page.

Wales

Wales has no separate first-time buyer relief. First-time buyers pay the main LTT rates, although the first £225,000 of a main-rate residential purchase is currently charged at 0%.

The current main residential bands are:

For a £300,000 main-rate purchase, the tax would be 6% of £75,000, which is £4,500. Confirm the current position with the Welsh Government LTT rates and bands and its LTT calculator.

A previous property can change your status

The everyday meaning of “first-time buyer” can be misleading. If you have previously owned or inherited residential property in the UK or abroad, you may not qualify for first-time buyer relief even if you have never had a mortgage.

Buying jointly can also change the tax result. In England and Northern Ireland, every buyer must qualify for the SDLT relief. Tell your conveyancer about any property that each buyer has owned or inherited.

3. Solicitor or conveyancer fees

Your solicitor or licensed conveyancer handles the legal transfer of the property. MoneyHelper gives a typical legal cost of about £2,000 including VAT, but complexity can increase the price. See also what conveyancing involves and how to find a solicitor.

A quotation may include, or list separately:

• Legal fees
• Local authority and other searches
• Land Registry work
• Identity and anti-money-laundering checks
• Bank transfer charges
• Stamp Duty or Land Tax return work
• Leasehold, shared ownership or new-build supplements
• Help to Buy ISA or Lifetime ISA administration

Compare the total expected bill, not only the headline legal fee. Ask what is excluded and what happens to the charge if the purchase falls through.

Searches

Searches tell your conveyancer about matters that may not be clear from a viewing. They commonly cover local authority records, water and drainage, and environmental information. MoneyHelper suggests budgeting about £250 to £300.

Your conveyancer may recommend extra searches because of the location. Mining, flood, planning or infrastructure searches can add to the bill, but skipping relevant checks to save money can leave you without important information.

4. A mortgage valuation is not a home survey

This is one of the easiest costs to misunderstand.

A mortgage valuation is for the lender. It checks whether the property appears to provide suitable security for the loan. It may be a short visit, a remote assessment or a computer-based valuation. It is not a detailed report on the condition of the home.

A home survey is for you. It can identify visible defects and help you understand the risks before you become legally committed. Read more on the different types of property survey.

MoneyHelper puts a mortgage valuation at about £150 to £800 when the lender does not cover it, and a home survey at about £400 to £1,500. The right survey depends on the age, construction, condition and complexity of the property.

Do not assume that a lender approving the mortgage means the roof, heating, wiring or structure is sound. If a survey finds a serious problem, obtain specialist quotations before deciding whether to renegotiate, continue or withdraw.

5. Mortgage fees can change the cheapest deal

A low interest rate does not automatically make a mortgage the least expensive option. Check the rate, fees and the total amount payable over the period you expect to keep the deal.

Possible charges include:

• Booking fee: commonly £100 to £200
• Arrangement or product fee: commonly £1,000 to £2,000 or more
• Mortgage account fee: commonly £100 to £300
• Broker or adviser fee: a fixed amount, hourly charge or percentage of the mortgage, depending on the adviser

Some advisers do not charge the buyer and receive commission from the lender. Others charge a fee and may also receive commission. They should explain how they are paid before you proceed.

You may be offered the option to add a lender fee to the mortgage. That reduces the cash needed immediately, but you will normally pay interest on the fee for as long as it remains part of the loan. Compare the upfront saving with the total repayment cost.

6. Costs you may lose if the purchase falls through

In England, Wales and Northern Ireland, an accepted offer is generally not legally binding until contracts are exchanged. A chain can fail before that point because of finance, survey results, legal issues or another buyer or seller changing plans.

Money already spent on the following may not be recoverable:

• Survey
• Mortgage valuation or application charges
• Searches
• Part of your legal bill
• Broker fees
• Travel, removals deposits or storage bookings

Ask providers when a fee becomes due and whether any part is refundable. Some conveyancers and insurers offer products designed to reduce fall-through losses, but check the terms, exclusions and overall value.

The process is different in Scotland, where the legal stages and point of commitment differ. Your solicitor should explain when you become bound and which costs are at risk.

7. Insurance starts sooner than many buyers expect

Your lender will normally require buildings insurance. In England, Wales and Northern Ireland, the buyer often becomes responsible for the property at exchange of contracts, so your conveyancer and insurer should confirm the date cover needs to begin. In Scotland, ask your solicitor when the risk passes under your contract.

Buildings insurance covers the structure. Contents insurance covers possessions. They are different from income protection, life insurance and critical illness cover, which may also form part of your wider financial planning.

Do not choose cover on price alone. Check the rebuild value, excess, exclusions, flood and subsidence position, unoccupied-property rules and any requirements imposed by the mortgage lender.

8. Moving day costs

MoneyHelper gives a broad removals estimate of £400 to more than £1,000. The cost depends on distance, access, property size, packing and how much you move.

Your moving budget may also need to cover:

• Boxes and packing materials
• Professional packing
• Storage
• Parking permits
• Time off work
• Childcare or pet care
• Cleaning
• Mail redirection
• Travel and overnight accommodation
• Replacement locks

Get removal quotations early, but avoid committing to a non-refundable booking until the completion date is sufficiently certain.

9. Leasehold and managed-estate charges

If you are buying a leasehold flat or house, the purchase price and mortgage payment do not show the full cost of ownership.

Check:

• Current annual service charge
• Recent increases and previous years' accounts
• Reserve or sinking fund balance
• Planned major works
• Ground rent and review terms, where applicable
• Buildings insurance arrangements
• Fees for notices, certificates or permissions
• Lease length and the likely cost of extending it

Service charges may pay for maintenance, repairs, cleaning, insurance and shared facilities. Major works can lead to large one-off bills. The GOV.UK leasehold guidance explains the main charges and documents to review.

Freehold houses on newer developments can also have estate management charges for roads, landscaping or shared areas. Ask what is covered, how the charge has changed and whether any major work is planned.

10. New-build and shared ownership extras

A new home can have costs that do not apply to an older freehold property. These may include:

• Reservation fee
• Optional finishes or upgrades
• Independent snagging inspection
• Estate or service charges
• Fees connected with incentives or gifted deposits
• Window coverings, flooring, appliances or landscaping not included in the specification

MoneyHelper suggests about £300 for a new-build snagging survey. Read the specification line by line so you know what the price includes.

With shared ownership, budget for both the mortgage and rent on the share you do not own, plus any service charge. Legal and mortgage work may also be more specialised. Ask how future rent reviews and staircasing fees work.

11. Lifetime ISA rules can affect your budget

A Lifetime ISA can provide a 25% government bonus on eligible savings, but the home-purchase rules are strict.

For a charge-free first-home withdrawal, the property must cost £450,000 or less, you must buy it with a mortgage and intend to live there. The purchase must also be at least 12 months after the first payment into the Lifetime ISA, and the money is released through an eligible conveyancer.

A withdrawal that does not meet the rules normally faces a 25% charge on the amount withdrawn. Because that charge applies to the government bonus and your savings, it can leave you with less than you originally paid in. Check the GOV.UK Lifetime ISA home-purchase rules before offering on a home above the limit or setting a completion timetable.

12. The first bills after completion

Owning starts as soon as the purchase completes. Keep money available for costs such as:

• Council tax
• Gas, electricity and water
• Broadband installation or early termination charges
• Service charges and ground rent
• Repairs identified by the survey
• Boiler servicing and safety work
• Furniture and essential appliances
• Decorating and flooring
• Gardening equipment and basic tools

You do not need to furnish every room immediately. Safety, weatherproofing, heating and essential appliances should usually come before cosmetic work.

Ask the seller which appliances, fittings and contents are included. Your legal fixtures and fittings form should record the agreement, but it is still sensible to budget for items that may need replacing soon.

A worked first-time buyer budget

Suppose you are buying a £300,000 home in England with a 10% deposit. The property qualifies for first-time buyer SDLT relief and the lender provides a free valuation.

This is an illustration, not an average or quotation. A buyer using a fee-free mortgage might need less. A leasehold, new-build or complex transaction could cost more. The example also excludes any emergency repair reserve.

The important point is that a £30,000 deposit does not mean £30,000 is enough to complete the purchase safely. You can also estimate selling costs if you will need to sell later.

How to avoid a last-minute shortfall

Get written quotations

Ask the solicitor, surveyor, broker, lender and removal company for itemised figures. Record which amounts include VAT and which are estimates.

Keep fees separate from the deposit

Use separate savings pots or a simple spreadsheet for the deposit, pre-completion fees, completion money and post-move reserve. This makes it harder to commit money twice.

Check when each payment is due

Some charges arise before exchange, some at exchange and others on completion. A total budget is useful, but a payment timetable tells you whether the cash will be available on the right day.

Read the survey before spending the reserve

The survey may uncover immediate work. Keep your repair money untouched until you understand the property and have obtained relevant quotations.

Recalculate when the purchase price changes

A higher price can affect the deposit, mortgage, tax and insurance. A lower negotiated price may reduce some costs, but it does not automatically change fixed legal or survey fees.

First-time buyer cost checklist

Before making an offer, check that you have allowed for:

• Deposit
• SDLT, LBTT or LTT
• Solicitor or conveyancer
• Searches and disbursements
• Home survey
• Mortgage valuation
• Mortgage product and account fees
• Mortgage adviser or broker fee
• Buildings and contents insurance
• Removals, storage and packing
• Leasehold or estate charges
• New-build or shared ownership costs
• Initial repairs and essential purchases
• Emergency cash after completion

Frequently asked questions

Sources and review date

This guide was reviewed on 28 August 2026 using:

• MoneyHelper: mortgage fees and costs when buying or selling a home
• MoneyHelper: first-time home buyer guide
• GOV.UK: SDLT relief for first-time buyers
• Revenue Scotland: LBTT for residential property
• Welsh Government: LTT rates and bands
• GOV.UK: buying or owning a leasehold home
• GOV.UK: Lifetime ISA home-purchase rules

Costs and tax rules can change. This article provides general guidance and is not personal financial, tax or legal advice. Confirm the figures for your purchase with the relevant government calculator and qualified professionals.