FTB - Legal, sundry costs

kracjac

Hi All,

I am a FTB in my mid-twenties & have managed to save up around £40k, in the past 3yrs. Earnings wise - have just crossed the £30k mark very recently and do hope to become a HRT payer by the end of the year.

Have been looking at buying in/ around London, for the past month or so. I'm looking to buy something around the £180k - £200k mark.

Can the experienced, please advice if £40k is seriously reasonable for me to go and start researching a property with a view to buy. I'm specifically concerned about the additional legals, surveying, sundry costs, etc that need to be done when buying a property. How much would these roughly approximate to ?

Also, do plan to save around £4-5k more, as an emergency contingency fund before finalising anything.

Thanks

Yorkie1

If I recall correctly, I paid no more than £7-800 to the solicitor (this included search fees etc), the survey cost a few hundred £, don't forget stamp duty, and moving up to about £5-600 if you get people to pack you up as well as move you. I'd budget around £2K plus stamp duty and you'll probably have change.

bodmil

I'm probably a little over zealous about it, but I plan to save 3k for costs, 2k for essential items like furniture and white stuff, 6 months of mortgage payments in case I lose my job just as it all goes down, and an addition 5k in general savings in case something major needs repairing urgently. So 16k on top of a deposit.

kracjac

Right, Thanks guys.

Yorkie: I had roughly approximated around £3-£3.5k tops for the legal costs, etc. Probably get the stamp duty exemption, so save on that.
But still unsure, am I being too conservative here.

Bodmil: I can see the prudence of saving up for 6 months of mortgage pmnts, but well that would take about another 5-6months to save up, wouldn't it ? If I'm to do this, then I just hope that house prices/ interest rates don't jump up too high.

I'm not too bothered about the furnishing costs, as long as it is structurally sound. I'm not planning to buy Fixtures and fittings for the whole house as soon as I move. Don't mind just getting by in the initial months and buying as and when.

LittleMissAspie

Stick it all in a spreadsheet as you think of things and add it up. You'll need some furniture, you need a bed, something to keep your clothes in, things to cook with, eat off etc. And I wouldn't recommend buying the cheapest mattress you can find, that's a false economy

Anyway my buying costs are:
solicitor 1186
mortgage fee 99
mortgage valuation 160
homebuyers report 340
house insurance 100 (at a guess)

And moving costs:
man with van 50
mail redirect 30
white goods 400 (will need a cooker and washer)
furniture 200 (will need a wardrobe and dining table)
change locks ??

That's approx 2.5k so far and I've probably forgotten something.

40k is a 20% deposit on 200k which is good, but can you borrow 160k on a 30k salary? It's over 5x.

getmore4less

50% pay rise before the end of the year is good going.
40% tax kicks in £43875.

£40k saved in 3 years should be able to manage another £10k by the end of the year.

£45k deposit £5k costs + a bit of buffer.

That leaves £135k-£155k so between 5.2 - 3.1 salary multiple depending on borrowing/income changes.