Buying your first home can be a bit of a minefield. From terminology to hidden costs, there’s a lot to get your head around.
In this blog, we’re delving into the expenses you can expect as a first-time buyer. This will give you an idea of how much you need to save alongside your deposit to purchase a Pocket home.
First-time buyer costs
Reservation fee
Once you’ve completed your affordability assessment on My Pocket and viewed an apartment you want to buy, you’ll have to submit an Expression of Interest form to enter the lottery to purchase a home. If you’re offered one of the homes, you’ll be required to pay a £500 reservation fee.
Property survey
Once the offer details are confirmed and conveyancing starts, you may wish to book a snagging survey with a chartered surveyor. This isn’t a requirement, but it can be useful to get a clearer picture of the property and any potential issues that could arise. Typically, a new-build snagging survey costs around £375.
Mortgage broker fee
When applying for a mortgage, it’s best to seek help from an Independent Financial Advisor who can help you find the best deal. We recommend using an IFA like Censeo Financial, as they specialise in affordable homes and know which lenders are available. They charge a broker fee of up to £495, which is payable upon application.
Mortgage arrangement fee
Sometimes, banks and building societies charge mortgage arrangement fees for setting up your loan. It’s a one-off charge, typically between £1,000 and £2,000, that can unlock better interest rates. You’ll have the option to pay it upfront or add it to your total mortgage amount, but in this case, you’ll pay interest on it.
Conveyancing fees
After agreeing your purchase, the conveyancing process begins. You’ll appoint a solicitor to act on your behalf, and they’ll undertake searches and sort out all the paperwork.
Rates vary between solicitor firms, but you can expect to pay between £1,500 and £2,500 in conveyancing fees for a new-build leasehold property.
Stamp duty
Stamp Duty Land Tax (SDLT) is the tax you pay on property purchases above a certain price. For first-time buyers, the threshold is set at:
- No SDLT up to £300,000
- 5% SDLT on the portion from £300,001 to £500,000
Top tip: Keep an eye out for ‘stamp duty paid’ incentives, which we sometimes offer on Pocket homes.
Moving costs
Moving your belongings into your home will incur some costs. You can keep expenses down by doing it yourself – maybe with the help of friends or family – and reuse boxes to minimise the cost of packing materials.
If you’re moving furniture, you may prefer to hire professional movers. The cost of this will vary depending on things like the company and distance, but you can expect to pay a few hundred pounds for a professional moving service.
How to buy a Pocket home in London
At Pocket Living, we help Londoners become homeowners by offering flats for sale with full ownership and a 20% discount off the full market value.
Get started by creating a My Pocket account and undertaking an affordability assessment for the development you’re interested in. Additionally, check out these saving strategies to help you reach your financial goals.
