More than half of homeownership hopefuls aren’t budgeting enough to fulfil their dream, as costs for surveys, legal fees and valuation exceed expectation by 73%, a new research found.
Home builder Barratt Homes put together a new study which shows that since 2012 more than 50% of first-time buyers are spending almost £5,000 on all the costs and fees that come with buying your own home.
The average budget for those additional costs for first-timers lies at £2,865 – more than £2,000 below the actual price tag – and only 28% of buyers manage to keep their costs this low.
As £2,000 can be an incredibly large amount of money for those buying their first home, the house builder decided to have a closer look at how much they’d actually have to spend.
The report found that most first-time buyers forgot about some of the costs, such as valuation, survey and arrangement fees. A total of 18% of respondents even said they were completely unaware of these costs.
Over the timeframe of the study, the last five years, more than 30% of first-timers had to ask for support from the Bank of Mum and Dad to cover additional costs. The number increased from 24% five years ago to 40% over the last year.
One in five respondents don’t struggle to budget at all as they’re saving more than they actually need, by an average of over £1,200.
A Barratt spokesman explained:
“The results of this research clearly show buyers are struggling to understand not only how much they need to budget, but also what that budget should be covering. However, where people are able to seek out and receive expert advice, not only are their budgets helping them plan better, but almost a quarter of people are making substantial savings as a result.”