What are the legal fees and costs of buying a new-build home?
From mortgage arrangement and conveyancing fees to Stamp Duty, we’ve shone a light on the key costs to help you figure out what you should budget for.
What are the average legal fees and costs when buying a new-build home?
When you’re buying a new-build home in London you’ll need to factor in a variety of legal and other costs. On top of various mortgage related costs, there are property valuation, survey and Land Registry fees to consider, Stamp Duty and, last but not least, conveyancing fees.
Working out exactly how much these will cost isn’t an exact science, but the following table gives you an idea of the typical amounts you might expect to pay.1
|£0 to £2,500
|Mortgage booking fee
|£99 to £250
|£150 to £300 (but can vary depending on property value)
|Mortgage broker fee
|£0 to £500
|£300 to £900 for a RICS Home Survey Level 1
|Land registry fee
|£200 to £300
|£300 to £1500
|£0 if you’re a first time buyer and the property is under £425,000
So let’s look at some of those legal fees and home buying costs a bit more closely.
Mortgage arrangement fee
This fee will be paid to your mortgage provider. Depending on the lender and product you’ve gone for, you can generally choose two ways to pay it:
- Upfront – this gets the payment out the way, but if anything goes wrong with your home purchase you may lose the money.
- Include it as part of your mortgage – this delays the payment, but you’ll pay interest on it for the life of your loan.
If you’re a first-time buyer and new to the world of mortgages, financial websites like MoneySavingExpert and MoneySuperMarket can give you a good idea of what’s out there.
The cost of a mortgage arrangement fee can range from £0 to £2,500.
Mortgage booking feeThis kind of fee is pretty rare these days, but some lenders may still charge one as a way to secure your mortgage at a fixed rate. It can also be called an application or reservation fee.
If you do need to pay one, it’ll be charged as soon as you put in your mortgage application.
The cost of a mortgage booking fee typically ranges from £99 to £250.
Property valuation fee
Your mortgage lender will charge this fee to check how much your new-build home is worth. They do this for their own security, so that they can be sure that the amount they’re lending reflects the true value of the property.
The cost of a valuation fee typically ranges from £150 to £300, but could be more.
For your own peace of mind, it’s a good idea to conduct a survey of the property you want to buy to make sure it’s in good condition. It’ll reveal any structural issues, problems with plumbing or signs of damp.
You could ask your lender to conduct the survey for you and add it to the cost of your mortgage. Or you can find and pay for your own surveyor – the Royal Institute of Chartered Surveyors is a sensible place to start.
The good news is that if you’re buying a new-build home, you may decide that you don’t need a survey at all. All brand-new Barratt London homes come with a 10-year NHBC Buildmark Warranty as standard so you can be confident about the quality of your home.
The cost of a RICS Home Survey Level 1 generally ranges from £300 to £900.
Mortgage broker feeIf you’re a first time buyer you might seek the help of a mortgage broker – a specialist with an in-depth knowledge of the market. They’ll work to find the best mortgage deal available that suits your personal circumstances. As with most things, it’s always a good idea to shop around and speak to a few first.
Almost all mortgage brokers receive commission from lenders. As a result some will give you fee-free advice. However others will charge you for their services. If you do pay a fee, it could be a fixed rate or calculated as a percentage of the amount you’re borrowing. That could prove expensive, so it’s always worth checking right at the start to see what the arrangement is.
The cost of a mortgage broker fee can range from £0 to £500.#
This is a tax you pay to HM Revenue & Customs via your solicitor when you buy a property.
Changes to Stamp Duty announced in September 2022 raised the limits at which people start paying this tax. The good news is that once you find the new-build home you’re looking for in London, you could save thousands. In fact, the new measures should reduce Stamp Duty costs for all movers by up to £2,500 – and for first time buyers that saving could be as much as up to £11,250*.
If want to learn more about Stamp Duty, the Government-backed MoneyHelper website is a useful source of information. And we’ve got what you need to know too.
This is the fee you’ll pay to your solicitor or conveyancer. It can be broken down into two parts:
- Legal fees that cover your solicitor's time
- Disbursements – any costs or expenses they incur during the process
Remember, that on top of the legal paperwork, your solicitor is responsible for transferring the ownership of the property. They will also arrange various environmental and local authority searches to ensure that there’s nothing in the area that may affect the value of your home.
The cost of legal fees typically ranges from £300 to £1500.
Land Registry fee
When you buy a home, HM Land Registry will charge a fee to register you as the legal owner. The fee is linked to the price of your property. Your solicitor or conveyancer will usually arrange this payment for you and then add it to your bill. Remember to ask them to pay the fee online as it’s significantly cheaper than doing it by post.
HM Land Registry offers a range of other services relating to registration and land charges. They also have a handy calculator to help you to estimate the cost of the service.
The typical cost of a Land Registry fee when paying online is up to £500.
Helping you make your move
Working out the costs involved is just one part of buying a home. Whether you’re a first time buyer or existing homeowner, we’ve got all the practical information you need to set you on your way.
Excited to see what modern, flexible, energy-efficient city living looks like? Discover your brand-new Barratt London today.
Start your search
*Figure based on a first time buyer purchasing a property worth £543,500.
1 Figures from Mortgage Fees and Costs and How much does a house survey cost in 2022, HomeOwners Alliance.