First Time Buyers Underestimate Additional Moving Costs
The average homebuyer is left with thousands of pounds in debt when purchasing a property, after underestimating additional costs, such as Stamp Duty, contents insurance and solicitors’ fees.
First Time Buyers Underestimate Additional Moving Costs
A new study by Aviva reveals that the average homebuyer budgets £12,143 for costs, which includes the deposit, surveys, furniture and buildings insurance.
However, the research shows that the average additional cost is actually £18,624.
Over half of first time buyers in London have asked a family member for a loan when buying a house, and the figure is also high in the East Midlands at 43% and East Anglia at 33%.
Buyers in the South West seem to handle their finances better, with just a quarter (25%) saying they had to ask a family member for a loan.
Marketing Director at Aviva, Heath Smith, says: “Scraping together the cash for the deposit alone can be a mammoth task, but that’s just the first hurdle. It’s the other essential costs such as solicitors’ fees and Stamp Duty, which can be the sting in the tail – not forgetting any essential repairs which might be needed once the keys have been handed over.
“First time buyers face walking into a money pit if a first dream home turns out to be a nightmare. If the cash outlay needed to buy the house isn’t expensive enough, a hefty bill for unforeseen essential repairs is the last thing needed.
“Anyone looking to buy a home should investigate every nook and cranny of the property before putting in an offer and must not be afraid of asking for several viewings.”1
The study reveals that first time buyers in East Anglia spent the longest amount of time saving for their home, at just over four years, while those in Scotland saved for just under three years.
People in the South East were the least likely to give up on buying while saving at 32%, but over half (60%) of Londoners are likely to give up.
Almost one in four Londoners had to take a second job to be able to afford their first home, compared to less than one in ten in Scotland.
Aviva surveyed 2,000 homeowners in June.
1 http://www.propertyindustryeye.com/first-time-buyers-underestimating-additional-costs/