Research conducted by money.co.uk has revealed the financial strain suffered by the one fifth of home buyers who fail to set realistic budgets for the purchase and ‘personalisation' of their new homes.
The study found that 21% of home buyers paid more for their properties than they planned to, with that budget gap averaging out at almost £23,000 per buyer.
In addition, home buyers spend an average of just over £8,000 on their property in the first year after purchase, but 23% do not budget for these expenses. In total, those unforeseen extra costs could add up to £30,600 for more than a fifth of home buyers.
The money.co.uk study also assessed how those extra costs are covered. For the average under-budgeted buyer, 60% of the shortfall comes from long term savings, weakening the ability to cope with future ‘rainy days'.
That leaves a further £13,400, of which just over half (63%) is funded using credit in the form of personal loans (15%), credit cards (27%) and extended mortgages (21%).
For many, these are long term debts, with only a third (35%) paying them off within the first year. One fifth of home buyers are currently paying off these debts on top of their monthly mortgage payments.
Chris Morling, MD of money.co.uk said: "These findings demonstrate why methodical planning and budgeting are such important first steps to buying a property.
“It is all too easy to overlook expenses and end up in a precarious financial position. Households with debt piled upon debt are most likely to be at risk during tough economic times."
Commenting on the findings, property expert and founder of Tepilo.com, Sarah Beeny said: "It amazes me how some buyers are still jumping in feet first without a thought for their budget limitations.
“House buying and renovation can be a rewarding and lucrative exercise, when done properly and to a budget. But hasty decisions on must have properties, fixtures or fittings will just result in financial turmoil."
