Stamp duty, solicitors and mortgage fees, moving-in costs and essential household bills are forcing the average new homeowner to fork out over £11K on their new property in first year alone – in addition to the expected cost of servicing the mortgage.
The good news though is that prospective borrowers are over-budgeting by over 30 per cent, or £3,488, meaning that although these costs are a huge financial burden to bear, borrowers are left within their limits.
Stamp duty is unsurprisingly the biggest setback, with solicitors’ fees also a major drain. On top of this, the average first-time buyer now has to dedicate 22 per cent of their annual income to steadily pay off their mortgage loan.
After the mortgage, the largest monthly outgoing is council tax followed by utility bills. Together these two costs account for a sizeable 59 per cent of a buyers’ monthly household running costs.
Gerry Bell, head of mortgage marketing at GEMHL said: “While the price of the property may be the major financial anxiety for buyers, they must also consider other expenses associated with the house purchase.
“At a time when interest rates have been steadily increasing, allowing oneself a financial buffer has never been as important.
“ It is reassuring to see that despite rising interest rates and general market turbulence, borrowers appear to have such a realistic outlook when it comes to how much their property is going to cost them – not just in terms of mortgage costs, but also in terms of the initial setting up and moving in costs and the ongoing household bills.”
