Extra costs to factor into your thinking

  • Written by 
  • 10/01/2014
How Barclays International Banking can help 4 of 4 How much can you afford and where? 2 of 4

Residents of the United States, please read this important information before proceeding

Please read this important information before proceeding.

To buy a property in London you will need to to pay a series of one-off costs. These include:

  • Legal costs
    To purchase a London property you’ll need to use an English property solicitor or “conveyancer” to protect your interests and ensure you comply with the law when buying. The costs of retaining such a person or company will depend on the value of the property, but typically your legal fees will total several thousands of pounds. There will also be various “search fees” that you will have to pay to your solicitors so that they can make the necessary enquiries of third parties. 

  • Stamp Duty Land Tax
    For residential property purchased in your own name, you will need to pay Stamp Duty Land Tax of between one and 12 percent on the purchase price if it is more than £125,000. The rate of SDLT increases to 15 per cent if the property is worth more than £500,000 and you purchase it through a corporate vehicle.  Barclays International Banking does not offer tax advice so it is important that you get this from a reputable third party.

  • A survey fee
    You also need to get a surveyor to carry out a survey of the property you intend to purchase, to verify that its condition is good and as described by the seller, and that you are likely to be paying the “right” purchase price. Surveyor’s fees vary but typically amount to a few hundred pounds.

  • An application fee
    Also known as a booking fee, this is paid to cover the work involved in setting up your mortgage or to secure certain mortgage rates.

  • Moving costs
    Finally, if you or a member of your family intends to move into the property, make sure you factor in the cost of moving furniture and other belongings too. Removal fees can quickly become expensive if you are moving large or numerous objects from overseas.

You will also need to consider ongoing costs, in addition to your monthly mortgage repayments. For example:

  • Council tax
    A tax payable to your local authority, which rises in line with the value of the property.

  • Buildings insurance
    A type of insurance that covers you against damage to the structure of your property from fire, flooding and so on. (Please note that Barclays International Banking does not sell insurance products.)

  • Utility bills for electricity, gas, water, telephone lines and so on.

In addition, for UK residents Capital Gains Tax (CGT) will be payable on any gain made on the sale of the property subject to the availability of principal private residence relief. It’s also important that you are aware of recent changes to Capital Gains Tax (CGT) which are summarised below:

  • Principal Private Residence Relief (PPR) – From April 2014 the final period of exemption will reduce from 36 months to 18 months. This means that individuals owning multiple properties will bear CGT on the property they no longer occupy following just 18 months of moving to another property. 
  • Non-residents – The government will introduce CGT on future gains by non-UK residents disposing of UK residential property from April 2015. A consultation will be published in early 2014.
Barclays International Banking does not offer tax advice so it is important that you get this from a reputable third party.

If you have a Relationship Manager with Barclays International Banking, they can help you factor these costs into your thinking – and help you to make the necessary arrangements to prepare your finances – as you consider whether to buy a property in London. They can also introduce you to one of our Mortgage Advisers, for further advice and guidance on how to proceed with your purchase.