Buying a house is a big investment.
You will want to make sure that you know what the costs will be, so that you can budget and have the funds available at the appropriate time.
So, how much does it cost to buy a house in Moray?
If you are thinking about buying a property, ask for a fee quote to give you an idea of the costs.
Every property is slightly different and solicitors have different ways of working out their fees.
Some of the costs payable to other organisations will depend on the value of the property you are buying.
If you are asking for an estimate before you have found the house you wish to buy, try and give as much of the following information as possible:
- your price range,
- whether you are getting a mortgage, and
- whether you are likely to purchase from a builder or buy an existing house that is being marketed.
Mortgage set-up costs
Bear in mind also that there will be other costs payable to your lender. The amount will depend on the particular lender and also the type of mortgage that you are offered.
Typically, a lender will have an application fee and a valuation fee.
You should check with your lender or mortgage broker what these fees are likely to be as they can vary. Even the same lender may charge different fees, depending on the mortgage offered.
These fees are likely to be payable at the time of your mortgage application and we suggest that you budget between £500 and £1000 for this.
Lenders will also usually charge a mortgage account fee, but this is usually added to the mortgage, which means that you would repay this over a number of years as part of your mortgage payments.
The last fee that a lender might charge at the time the mortgage is being taken out is a transfer fee, when the mortgage funds are being transferred to the solicitor’s bank account. This fee is usually around £30 and most lenders will deduct this from the loan funds. Your solicitors will take this into account when they are working out the exact amount you require to pay to complete your purchase.
The mortgage you take might also offer a “cash back” to assist towards the costs and, if this is part of your mortgage product, the cash back will be paid to your solicitor at the same time as they receive the mortgage funds.
Payments to your solicitor
The first payment that you might need to make to your solicitor would be a deposit, if you are buying from a builder.
Otherwise, your solicitor will ask for your contribution to the purchase price, their fees and the outlays (i.e. amounts needed to pay other organisations) at the same time. This is usually one or two days before the date of entry (settlement).
Solicitors must have cleared funds before those funds can be used. Your solicitor will normally ask that money is paid direct into their bank account.
Most common outlays
The three “fixed” outlays that a purchaser will have are –
- Land and Building Transaction Tax (“LBTT”) (formerly Stamp Duty Land Tax)
- Land Register fee for registering your title, and
- Land Register fee for registering the mortgage deed.
The first two of these depend on the value of the property you are buying; the fee for the mortgage deed does not.
Revenue Scotland’s website has an on-line calculator that you can use and the rates for LBTT are –
Purchase Price up to £145,000 – 0%
That part of the purchase price between £145,000 and £250,000 – 2%
That part of the purchase price between £250,000 and £325,000 – 5%
That part of the purchase price between £325,000 and £750,000 – 10%
That part of the purchase price over £750,000 – 12%
This means if you are buying a house at £150,000 you pay tax on that part of the price over £145,000 i.e. £5,000 at 2% = £100.00.
The Land Register also have a scale, the first part of which is –
Under £50,000 – the fee is £60
Between £50,000 and £100,000 – the fee is £120
Between £100,000 and £150,000 – the fee is £240
Between £150,000 and £200,000 – the fee is £360
Between £200,000 and £300,000 – the fee is £480
Between £300,000 and £500,000 – the fee is £600
The registration cost for the mortgage deed is always £60.
The other outlay which you probably will have is bank charges for the transfer from your solicitor to the seller’s solicitor. This is because most transactions are now done by telegraphic transfer. The Bank charges are normally between £15 and £30.
Your solicitor’s fee
The fee that your solicitor will charge for your purchase depends on a number of factors.
These include –
- the value of the property,
- which Land Register system the house is currently registered under (you can find more information about title deeds systems in the article here),
- whether you are obtaining a mortgage, and
- other complexities.
Complexities could include things like whether the house has a private water or drainage supply. A title deed plan which is not suitable for Land Register purposes would be another possible complicating factor.
Usually, if you have asked for a quote for a specific property your solicitor will be able to make a reasonable guess at possible complications. They will use the information you have provided as well as local knowledge they may have gained from dealing with other nearby properties.
Even for a low value property without complications, you should budget at least £700 (plus VAT) for the fees. For an average property in the Moray area, the fee element (inclusive of VAT) would normally be around £1,200.
Beware of hidden costs
If you have been given a quotation, remember to ask whether any additional charges are possible and in what circumstances.
For example, ask whether there is any additional charge if the property is currently on the Sasine Register, or if alterations need to be checked.
In the same way that budget airlines often can have an attractive headline cost but, after adding on booking and baggage etc., you find that the cost has suddenly tripled, some solicitors will give you a basic fee quotation.
The important thing to know beforehand is what factors may change the fee, so that you are not caught out.
How we can help
If you have any questions about the matters covered in this article, please get in touch with us. The same goes for any queries about any aspect of our House Purchase / Sales and Estate Agency services.
An initial chat with us is without obligation to take things further. Get in touch and see how we can help you.