As an example, we calculated the cost of buying an off-plan two-bedroom apartment.
Agreed purchase price: £ 1,200,000. This price should be stated in the developer’s property reservation form.
Completion 2024
STEP 1 APARTMENT RESERVATION
A Client pays a £10,000 reservation fee by credit/debit card or bank transfer from a personal account.
Required documents: a copy of passport, copy of a recent utility as a prove of address and evidence explaining the source of funds.
STEP 2 APPOINTING SOLICITORS
The cost of legal services for the entire process is approximately £3,000 – £5,000.
Usually, solicitors will be asking for 50% of the fee to be paid on exchange with remaining balance to be paid at the completion stage.
STEP 3 EXCHANGE OF CONTRACTS
The cost of required legal searches is approximately £ 600 – £ 1000.
Prior to the day of the exchange a client will need to transfer an amount of 10% of the agreed property price less an initial deposit paid (in this example, it is £110,000) by bank transfer to buyer’s solicitor’s client account.
STEP 4 SECOND PAYMENT
Usually, after six months after the day of exchange, a client will have to pay another 10% (in this example, it will be £120,000).
STEP 5 COMPLETION
Upon completion, payment of the remaining balance of 80% (in this example, it is £960,000) will be required. If a client requires a mortgage it is advised to start the process of obtaining a mortgage offer six months before the completion.
Additional costs that will need to be considered and paid on completion:
- Stamp Duty Land Tax (£61,250 if this is the only property that a client has registered on his name or £97,250 if it is an additional property)
- Legal Disbursements (approximately £1,000)
- In a case when a client is buying using mortgage valuation of the property will cost approximately £ 1,200
- Bank’s administration commission for issuing a mortgage loan and additional mortgage broker’s fee will be between 0.5% to 1.5%
- Bank’s solicitor costs will be approximately £1,500.
- Proportion of the service change and ground rent. Service charge cost per annum varies for each new-build development, and can be from £5 per sq ft. In this case, the service charge per annum is £4,305 for an apartment that is 80 sq m (861 sq ft.) size. Annual ground rent is £550.
