£27,705: the upfront cost of buying your first home

We’ve unpacked the costs involved in buying your first home, from the deposit to solicitors' fees, Stamp Duty, insurance and more

As a first-time buyer, it’s easy to become obsessed with house prices.

Although prices aren’t always as high as some might think – particularly those who live outside London – a property’s price is obviously the main factor.

You do, however, get 25 or even 30 years to pay it off with a mortgage, and your repayments are likely to be cheaper than renting.

However, buying a house involves many upfront costs that need paying straight away – and we’re not talking small administration fees either.

These can run to thousands of pounds, our analysis of house buying costs found, even without Stamp Duty.

We’ve brought together the latest data and relevant exceptions to figure out how much you’ll need.

Planning to buy? We've put together a complete, no-jargon guide to becoming a homeowner

Here’s your bill

On average, an individual or couple buying their first home in the UK will need £27,705 in the bank.

However, that changes hugely depending on where you want to buy. Hover your mouse over your region to get an idea of how much money you'll need:

So how did we work this out? Here are the big upfront costs for first-time buyers and what you can do about them.

Deposit

UK average: £25,588

Unsurprisingly, the deposit accounts for the large majority of upfront costs:

A larger deposit isn’t just needed because a property is more expensive: it also reflects how big a mortgage you’re able to get.

First-time buyers borrow on average 85% of a property’s price, according to UK Finance, although that figure drops to 75% in Greater London.

It’s possible to borrow 95% or even 100% of a property’s value, but you may need help from parents or be prepared to pay a higher interest rate, meaning much higher costs in the long run.

We’ve put together a guide to saving for a deposit.

Applying for a mortgage

UK average: £1,005

Not only will you be paying for a mortgage for the rest of your life, but you’re also often expected to pay a certain amount upfront.

This is known as the ‘Arrangement Fee’ and could be as high as £2,000, although we’ve used an average figure of £1,005, from comparison site Moneyfacts.

Arrangement Fees don’t vary by region, although buying in an obscure or high-location could restrict your choice of mortgage lenders and hence incur higher fees.

It’s important to check the arrangement fee, as a mortgage with a low-interest rate could sometimes end up more expensive due to that upfront cost.

It is sometimes possible to get the Arrangement Fee rolled into the overall cost of the mortgage, meaning you pay it off gradually – albeit with interest now attached.

We haven’t included the cost of mortgage brokers and mortgage valuations in this comparison.

Online mortgage brokers Habito estimates just 10-15% of first-time mortgages now charge a separate fee for valuations, whilst many mortgage brokers are free to use.

Should you go to a bank, broker or comparison site? Applying for a mortgage explained

Getting a solicitor

UK average: £965

Solicitors handle the paperwork involved in transferring ownership (otherwise known as conveyancing) as well as conducting searches to flag up problems with your new home.

There’s no set amount for solicitors to charge, so we recommend you do your research and find one with fixed fees.

However, with the quality of solicitors varying hugely, it could be worth paying extra to get one with good reviews, which could save you months in waiting.

Our figures, from conveyancing comparison site Conveyancing Calculator, show that costs rise slightly with the property value, ranging from £895 up to £1,160.

How to find a trustworthy solicitor

Buildings Insurance

UK average annual premium: £119

Your mortgage lender will require you to have buildings insurance in place.

The figure we’ve used is from the AA and could vary considerably, although not necessarily by region. A smaller home may be cheaper to insure, and a home in a high-risk location such as a flood plain could cost a lot more.

Buildings Insurance is sometimes included within the service charge of apartments, but your solicitor should check.

Contents insurance isn’t compulsory but is highly recommended.

In both cases, you should compare prices and continue checking each year, in case your premium rises.

Cut your home insurance costs

Transferring money

UK average: £27.50

A small but irritating sting in the tail of buying a home: when you eventually come to transfer the money to your solicitor (who sends it to the sellers) you’ll need to pay a CHAPS fee.

Otherwise known as a Faster Payments service, the exact costs varies between banks but should be between £25 and £30, according to the Bank of England, so we’ve got for the midpoint - £27.50.

What about Stamp Duty?

UK average: £0*

You might have noticed that we haven’t touched on the bogeyman of property buyers – Stamp Duty.

That’s because, as a first-time buyer outside of London, you’re unlikely to pay any.

You don’t need to pay any Stamp Duty on the first £300,000 of your home in England and Northern Ireland.

Only in Greater London does the average first home cost more than that - £374,684 – in that case you’d need to pay a rate of 5% on the remaining £74,684, which works out as £ 3,734.

In Scotland and Wales, taxes kick in at different levels and are charged at different rates but, given the average price of the first home, you’d be exempt from both.

Confused? Read our piece on buying outside of England or try the Money Advice Service’s helpful calculator.

Can you survive the first year?

UK average: £7,356

While we’ve focused on upfront costs, it’s also important to consider mortgage repayments in your first year.

That’s when your finances are most likely to be tapped out after paying for all the things mentioned above.

These vary considerably by region and whilst they may still be cheaper than renting, they’re still substantial.

Plus, they don’t include Council Tax, utility bills or, if you live in an apartment, service charge and ground rent.

You can have a look through the complete costs of buying for your region and how they compare here