Peeling Back the Layers: The True Cost of Home Ownership

Embarking on the property ladder can be an exhilarating journey. However, it’s vital to remember that the asking price of your dream home is merely the beginning. There are numerous concealed costs tied to purchasing a property that can catch you off guard if you’re not prepared.

When you’re ready to take the leap, you need to look beyond the asking price. Completion costs, for instance, are a medley of various fees and expenses you pay to finalise your mortgage. These can range from 2% to 5% of the loan amount and can include loan initiation fees, appraisal fees, title insurance, and more.

Before you put pen to paper, you’ll likely need a home inspection to check for structural issues or required repairs. This can set you back several hundred pounds. Similarly, your lender will require a home valuation to determine the property’s worth.

Location is key when buying a property, and this extends to council tax as well. Depending on the area, council tax can significantly add to your monthly expenses. It’s essential to research the council tax rates in the area where you’re buying to understand the long-term financial commitment.

Insurance is another factor to consider. Homeowners insurance is essential and can vary in cost based on location, home size, and coverage. If your deposit is less than 20%, you might also need to pay for private mortgage insurance (PMI).

Owning a home means being responsible for all maintenance and repairs. These costs can vary widely, but it’s wise to set aside 1% to 3% of your home’s purchase price annually for maintenance.

Utility bills such as water, electricity, gas, internet, and rubbish removal can be higher than you’re used to, especially if moving from a smaller residence or a different area.

Lastly, if you’re buying in a community with a Residents’ Association, these fees can be a significant monthly expense, covering amenities like landscaping, pools, and fitness centres.

Understanding these hidden costs allows you to budget accurately and avoid surprises during the home-buying process. It’s about being financially prepared, ensuring your home purchase is as joyful and stress-free as possible. Remember, knowing the full cost of homeownership is key to making a wise and sustainable investment.


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Finding a mortgage

Buying a house is a massive investment and getting it just slightly wrong can be costly. Unless you have big savings, chances are you’re going to have to get a mortgage. It’s a loan secured against the property which means if you can’t meet the repayments the lender may repossess your home and sell it to get their money back.

The better you understand mortgages and everything to do with them, the better armed you will be to get the very best deal. With MMR in place, you’ll need to review your finances themselves before approaching possible lenders to see whether you can afford the monthly payments now and if interest rates go up, which they will…

What is MMR?

When it comes to finding a mortgage you have several options: mortgage brokers, individual banks or searching online. Again, it’s important to do your research. Searching online first, gives you a good idea of what’s available, but an independent mortgage broker can provide a more in-depth search and help you through the process. Being independent holds great value as they are not bias to any particular lenders or deals, they will give you their honest opinion and take away the stress of working your way through the mortgage market, they work for you to find you the best package to suit your requirements.

For more information on the current mortgage rules and deals, contact your local branch today to arrange an appointment.

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