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Stamp Duty And Other Buying Fees...

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Now that HPI is clearly on the wane for all to see, all of the additional costs associated with buying, and then selling a property later on, suddenly start to become very important, especially for investors.

For a typical £250K property you have:

Stamp duty - £2,500

Solicitors fee for buying - £700

Mortgage fee - £500

Estate agents fee when you come to sell (assuming you get what you paid for the property)

: say 1.5% + VAT = £4,400

Solicitors fee from selling - £700

TOTAL FEES - £8,800 (This all assumes no redemption fee for terminating your mortgage early)

Previously people didn't care about fees because they assumed HPI would overtake these costs within a few months.

Now there is no such guarantee.

For a £325K property, using the above assumtions takes us to an amount equal to £17.4K of the original purchase price.

And most impotantly for non-investors doing their rent v buy calculation, these fees make a huge difference as to whether it's worth buying soon or staying in rented a while longer.

If you were planning to buy a flat/small house now with a view to trading up in a couple of years, these extra costs make that far less worthwhile.

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  • 338 Brexit, House prices and Summer 2020

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      • down 5% +
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