£50k to secure a home, £20k a year to maintain

Research by estate and lettings agent, Barrows and Forrester, has revealed the current eye-watering cost of obtaining and maintaining a foot on the property ladder, following a pandemic property market boom that has seen house prices climb to record highs.

The initial cost of buying – £49,386
With the average UK house prices currently sitting at £278,436, the largest initial hurdle facing homebuyers is the mortgage deposit, which based on the average of 15%, comes in at a hefty £41,765.

This is swiftly followed by stamp duty at a cost of £3,912 on average, with mortgage costs such as booking and arraignment fees, mortgage valuations and electronic transfer fees totalling an average of £1,375.

A surveyors fee, while not essential, is highly recommended when buying a property as it can highlight any issues with the property that could be extremely costly if left unaddressed. This costs a further £425 on average, while the further costs required for legal and conveyancing fees and local searches is one of the larger initial costs at an average of £1,400.

Finally, there’s the cost of moving into your new property, which will set the average homebuyer back a further £500.

In total, this brings the initial cost of buying a property to just shy of £50,000 for the average UK buyer.

Ongoing costs – £19,796 per year
But the financial strain of homeownership doesn’t stop there. Based on the current market, Barrows and Forrester estimates that the average UK homeowner will pay £12,513 in mortgage repayments on an annual basis.

Property maintenance and repairs also average £2,784 per year, with council tax (£1,966) and running costs such as gas and electricity also totalling £2,390 on average each year.

Finally, while marginal in comparison to the rest, buildings and contents insurance adds another £142 per year to the average cost of owning a home.

This means that the average homeowner is looking at a total ongoing cost of almost £20,000 per year once they’ve secured a foot on the ladder.

James Forrester, Managing Director of Barrows and Forrester, commented:

“Homeownership is one of life’s great personal achievements but it does come at a substantial cost, a cost that has grown considerably during the pandemic property market boom.
For many, purchasing a property can be far more expensive than anticipated as they fail to consider the additional financial requirements beyond that of the initial mortgage deposit and stamp duty cost.

But there’s also the ongoing costs to consider and these can also be higher than expected, as many of us don’t budget for aspects such as maintenance.

With monthly mortgage payments also increasing along with the current cost of living, it’s vital that homebuyers consider what they can afford above and beyond the initial cost of buying, as borrowing beyond their means may well find them in financial turmoil further down the line.”