Buying and Selling Properties | The Second Mortgage Company

Buying and Selling Properties


If you are considering buying a property or want to sell your existing one, there are a number of costs, taxes and charges as well as some other financial considerations that you are likely to need to factor in when it comes to whichever decision you ultimately make.

Understanding and properly considering the fees you will need to think about when you are deciding to buy or sell a property can make all the difference. With charges, taxes and other fees potentially costing many tens or even hundreds of thousands of Pounds, being well-informed can make a big difference with regards to what your budget will be, as well as the costs for selling or buying a home in the short and the long run.

Fees When Buying a Property

When buying a property in the UK, the precise fees, taxes and charges that you are likely to have to pay are dependent on various factors such as the intended use of the property, the nature of the property in question, whether it is your first property or one of many and several other important factors. The charges you are likely to face however may well include the likes of Stamp Duty, Legal Fees and Conveyancing. Additionally, it may be the case that you have used a second mortgage to cover some of the cost, so it is important you understand what the charges are and what they entail.

Stamp Duty Charges

If you are a first-time buyer, you will be lucky enough to not have to pay any Stamp Duty if the property on the first £300,000 up to the value of £500,000. This is a tax-relief provided to those purchasing their first home, so it does not apply to one's first investment property. If the property is above this rate you will however have to pay Stamp Duty fees.

If you are not a first-time buyer, you will be required to pay stamp duty (government tax) on properties that cost £125,001 and more. Legislation also requires those who are buying additional residential property to pay 3% extra on property valued above £40,000 if it is being bought in order to be used as a buy-to-let property or as a second home.

If you are unsure about the exact amount you will need to pay for Stamp Duty, there are various online Stamp Duty calculators, which can help you to figure out how much you will be likely to pay if you are buying a house in England or Northern Ireland.

If however, you are buying a property in Wales, the system works slightly differently, meaning you will need to pay a Land Transaction Tax, whereas in Scotland you will need to pay the Land and Buildings Transaction Tax.

Deposits for Properties

The amount you will need to save towards a deposit varies. On average it is estimated that you will need to save between 5% to 20% of the property’s full purchase price.

Valuation Fees

If you are getting a mortgage, the lender will carry out a valuation of the property that you are purchasing in order to determine how much they will be willing to lend you. It is important to note that not all lenders do this, as it is dependent on the exact mortgage product you go for. However, if the mortgage lender you are choosing to go for does, you can expect the cost to reasonably be between £150 and £1,500. The exact amount though, will be based on the property’s value.

Surveyor's Fees

It is important to get any property you are considering buying professionally surveyed prior to purchasing it, as it may make the difference between you purchasing it or not. This is also a way of avoiding potentially nasty surprises in the future relating to any potential problems with the building. Surveyor's fees depend on whether you go for a basic home condition survey (these are priced at around £250) or a full structural survey of the property (this can cost £600 or more.)

Legal Fees When Buying a Property

When buying a property, you will need a solicitor or a licensed conveyor, who will assist with the legal documentation that must be completed. Legal fees on average cost in the region of £850 to £1,500, including VAT at 20%. In addition, you can expect to pay around £250 to £300 for them to do local searches in order to assess potential local problems or plans.

Charges and Fees When Selling a Property

The costs, charges, taxes and financial considerations that you will likely need to think about when you come to sell a property are important to note for various reasons. Principally, it is crucial to know what you will have to pay for the sale of the property to know whether or not it is in fact financially viable to dispose of the property in question.

Estate Agent’s Fees

Whilst you do not necessarily need to sell a property through an estate agent, many decide to do so given how time-consuming and stressful it can be to sell a property privately.

The precise fees will depend on the contract and the company you choose, but high-street estate agents tend to charge a rate of 1.3% including VAT. Online estate agents may be cheaper so it is worth researching if costs are an issue. However, you may not get the full level of service you would receive from a high-street estate agent should you go solely online.

Energy Performance Certificates

It is a legal obligation if you are selling a property in the UK to be able to provide potential buyers with an Energy Performance Certificate (EPC) for the property being sold. The EPC shows the buyer the energy efficiency of the house they may be buying. An EPC certificate is valid for 10 years and you will need to pay between £50 and £120 in order to get an EPC. To arrange this, you can ask your estate agent, or arrange it independently.

Conveyancing Fees

Conveyancing fees for selling a property can be expected to be between £500 and £1,500 depending on the complexity of the transaction and they will either charge you a percentage of the property’s valuation or a fixed fee. Hiring a licensed conveyancer or solicitor is vital in order to detail the legal aspects of selling your home properly and legally.

Removal Company Fees

Many people when selling a property will decide to get the help of a professional removals company to help them move, with the intention of making moving property less stressful and more manageable. If you do decide to hire help from a removal company, try to get a few quotes from different companies first, but you can expect to pay anything between £400 and £1,200 for their help. The exact amount though, will depend on the amount of items and possessions you will need moving as well as the difficulty in moving the items.

As a mortgage is secured against your home, your home could be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home.

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