Don’t let extra home costs blow your budget

Getting on the property ladder is an exciting but expensive moment.

But the spending doesn’t end when the keys are handed over - and that can take some people by surprise.

In fact, research from the HomeOwners Alliance shows that 16% of 18 to 34-year-olds wish they’d budgeted better for extra buying costs like legal fees and surveys. 

And a further 16% said they were caught off guard by renovation expenses.

In other words, nearly one in three feel they weren’t adequately prepared for the costs that come with buying and owning a property.

So if you’re a recent buyer, or hoping to get on the property ladder soon, how you can you avoid the same pitfalls?

Look beyond the deposit

Saving for a deposit takes time and effort, but it’s not the only cost if you’re buying a house. 

You might also have to pay:

• solicitor or conveyancer fees
• survey costs
• mortgage arrangement fees
• stamp duty
• removal fans or storage
• new locks and security features
• small repairs when you move in

Even relatively small costs can quickly mount up, so it’s worth factoring them into your budget early on.

Plan for renovations

Even modern properties might need a little work, or you might want to inject your own tastes and personality into your new home.

So it’s well worth putting money aside for renovation work.

It doesn’t need to be a huge amount and it can help you avoid borrowing money and relying on your credit card.

Keep on top of your monthly expenses

Once you’ve bought a property, you’ll have many different expenses to think about other than your mortgage.

Create a simple monthly budget that includes regular costs such as:

• council tax
• utility bills
• buildings and contents insurance
• ongoing maintenance, such as getting your boiler serviced

Check out our guide to how to create a budget, so you can see how much money you have coming in each month and prioritise your spending.

And give our budget planner a try - it’s free and easy to use.

Build an emergency fund

Unexpected events, like your roof leaking or your boiler breaking, can be expensive.

And if you’re on a tight budget, even a small shock can have a big impact.

That’s why having a rainy-day fund - a pot of money set aside for emergencies - is so important.

Again, you don’t need to save hundreds right away.

Even if you only put aside £1 a week, it’s better than nothing and could make a big difference if and when you ever need it.

Don’t do everything at once

When you move into a new home, it can be easy to get carried away with home improvement ideas.

But some of the renovations you have in mind will be purely cosmetic, so prioritise essential upgrades such as getting the house rewired or fixing damp.

Write a list of what needs to be done, put them in order of importance and make sure you know how much each task will cost.

You can then budget accordingly and make sure you’re not overstretching your finances.

Owning a property involves more than paying your mortgage each month.

It’s a long-term financial commitment, but with careful planning and budgeting, you can stay on top of your regular expenses and be prepared for the future.