Money News
With stamp duty, mortgage fees, moving-in costs and essential household bills, the average new homeowner should expect to spend over £11K in the first year alone, according to lender, GE Money Home Lending.
Homebuying costs such as stamp duty, mortgage and solicitor's fees, surveys and checks, cost about £3K for the average buyer, whilst moving in and setting up home costs are even more with the average new home costing almost £5K once bought.
Aside from mortgage costs, essential bills equate to approximately £3.5K per year on an average UK property. However, according to the research, carried out on behalf of GE Money by the Future Foundation, the average prospective homebuyer expects to spend £3,488 more than this on costs such as stamp duty fees, furnishings and appliances, as well as the ongoing essential bills and services.
Stamp duty is the biggest setback in terms of getting on the ladder, costing the average buyer back some £1,200. Solicitor's fees are also a major burden and potential borrowers should expect to spend close to £900 on a solicitor and close to £600 on mortgage arrangement fees and surveys.
The costs associated with buying one's first home do not, of course, rest at the house purchase itself. Buyers must also take into account the products and services needed to make the home both a functional and a desirable place in which to live. Although these costs are often ongoing, the research suggests buyers need to find a further £4,721 to cover the cost of moving and equipping the new home. Again prospective homebuyers overestimate these costs by over £1,300.
Meanwhile, mortgage repayments have become a hefty monthly outgoing for home-owners, with the average first time buyer now having to dedicate 22% of their annual income to steadily pay off their mortgage loan. However, first time buyers must also factor into their monthly expenses the cost of running a household, in line with the lifestyle by which they wish to sustain.
The total monthly cost of running a household is £285 with the largest monthly outgoing being council tax followed by utility bills. Together, these two costs account for a sizeable 59% of a buyer's monthly household running costs, with the remainder going towards more lifestyle expenses such as internet access and digital TV.
19 September 2007 © Moneyextra.com
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