In the UK, the buyer is not responsible for paying the estate agent. The estate agent is working on behalf of the vendor to sell the property and is paid accordingly.
As a buyer, you will need to pay the agreed negotiated price for the property to the vendor through your solicitors, whilst the vendor pays their own solicitors for professional fees and their selling agent a commission.
In some countries (particularly in Scotland) the buying and selling process is a little different but in the UK we always recommend people to use a solicitor when purchasing a property.
What other costs are involved?
There are a number of other costs associated with purchasing a property, which will quickly add up if you have not budgeted effectively for them. These costs will vary according to the cost of the property so we would recommend you speak to your solicitor for a breakdown of costs, ideally before you have even begun looking at properties.
It is better to plan and be prepared financially rather than waste your time viewing properties that you cannot afford and having your hopes dashed, after falling in love with a property that is outside of your financial means.
Your solicitor will need an idea about the amount of money you are looking to spend on purchasing a property and should be able to give you guidance about stamp duty levels as well other costs which will include:
Fee for Conveyancing work
Fee for Stamp Duty Land Tax Return work (SDLT)
Electronic transfer of funds fee
VAT is payable on: the Conveyancing/legal work, handling of SDLT and dealing with any electronic transfers on electronic transfers of funds
HM land Registry Registration Fee
Local Search Fee
Drainage/Water Search Fee
Environmental Search Fee
Pre Completion Title Search fees
Chancel Check Search fee
Stamp Duty Land Tax
The largest single cost will be the Stamp Duty Land Tax and this is calculated based on the purchase price, so can be quite costly as an “extra” and needs to be included in any budget. Please see the example below.
If you buy a house for £1,275,000, the SDLT you owe is calculated as follows:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the next £675,000 = £33,750
10% on the final £350,000 = £35,000
Total SDLT = £71,250
For Buy-to-let and second homes the rates are different - an extra 3% is added for all properties above £40,000 if it is to be used as a buy-to-let or second home. To put this into actual money, the new 3% additional stamp duty on a £300,000 purchase will see the stamp duty bill nearly triple from £5,000 to £14,000.
Click here to access our stamp duty calculator or see below to see the table of rates.
Up to £125,000
If you are looking to purchase or rent a new property in the coming months and need help in searching, finding and negotiating the right price for your new home please do contact us on +44 (0) 1962 793100 or email: email@example.com.