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The fees associated with the legal part of the home-buying process – known as conveyancing – fall into two categories.
The fee you pay to your solicitor or licensed conveyancer for carrying out the work
The costs your solicitor (or conveyancer) pays to third parties on your behalf, known as disbursements.
All will need to be paid straight out of your pocket and cannot be added to the mortgage.
So what's the damage? We’ve broken down all potential costs so you don't miss a trick.
Legal fees
Solicitor fee for the purchase: This pays for your solicitor to complete the work on your behalf. Solicitors and property lawyers – collectively known as conveyancers – perform a range of tasks such as drawing up contracts, conducting searches and handling the chain of buyers and sellers.
Find more at our guide, What does a conveyancer do?
Bear in mind that some solicitors calculate their legal fee based on the value of the property, while others charge a standard or fixed fee. Make sure you find out which you're being charged.
Potential cost: £700-£1,000
Leasehold fee: buying a leasehold property can involve more work for the solicitor, so you could well face an additional fee, known as a 'leasehold premium'.
You could also pay extra if you are buying an unusual property or you are using a government scheme due to the extra work involved.
Potential cost: £150-£250
Telegraphic Transfer fee: also known as a ‘bank transfer fee’, this charge covers the cost of simply transferring funds from one solicitor to another on the day of completion.
Potential cost: £30-£75
Disbursements
Solicitors also need to make a number of payments to third parties on your behalf known as 'disbursements'. They include searches, Land Registry fees, and stamp duty.
These fees are universal and therefore generally easier to calculate.
Stamp duty: stamp duty is typically the largest disbursement, as it is based on a percentage of the value of the property you are buying.
Potential cost: As a bona fide first-time buyer, you will pay no stamp duty at all on homes worth up to £300,000. You will then pay 5% on the value between £300,001 and £500,000 (although only of the £200,000 difference).
If you buy a property worth more than £500,000, you will be treated like any other purchaser with stamp duty kicking in at £125,001. However, rules can change if you also already own a home when you buy again.
In July 2020, the government announced a stamp duty holiday, raising the 0% threshold to £500,000 for all buyers until 31 March 2021.
Stamp Duty Land Tax return: some solicitors will charge a fee for completing and submitting your stamp duty land tax form.
Potential cost: £30-£75
Searches
Bankruptcy: as it says on the tin, this is a quick check to ensure you’ve not been made bankrupt in the past.
Potential cost: £4
Anti-money laundering: to verify your identity and confirm that the details on your ID documents match up with other independent data sources. These are part of anti-money laundering regulations.
Potential cost: £6-£20
Search pack: for the Local Authority search, as well as Environmental and Water searches.
Potential cost: Around £300
Land Registry
Land Registry fee: covers the change to the legal ownership of the property you are purchasing so that you end up with your name on the property's title deeds. Fees for registering your new home at the Land Registry are charged on a sliding scale.
Potential cost: £150-300
Land Registry ‘search of whole’: this search is carried out so your property can be registered as soon as possible after completion.
Potential cost: £4-£8
There may be further charges for other disbursements, so check with your solicitor, and be sure to leave enough spare cash to cover them.
Ask for a full breakdown...
When obtaining a quote from your conveyancer, always ask for a full and clear breakdown of costs. Sometimes legal fees and disbursements are bundled together, making it tricky to compare quotes.
And check for hidden or additional fees so you know exactly how much you're going to end up paying.
... and don’t forget VAT
Finally, remember to ask your solicitor whether VAT (payable at 20%) is included in the final estimate, as it will apply to some charges. Be sure to factor this into your sums.