subject: Ignored Costs Can Bump Up Property Price [print this page] Unforeseen costs connected with buying a property in UK can add over 30,000 to purchase price.
It has been claimed that costs of up to 30,600 may be incurred by fees which buyers don't even consider. Apparently, a fifth of those looking to buy property get themselves into financial difficulties by not setting a realistic budget, and pay out much more than they expect to. This gap between the budget set and the actual amount paid averages at about 23,000 per purchaser.
In addition, home buyers spend an average of just over 8,000 on their property in the first year after purchase, but 23% do not budget for these expenses. In total, those unforeseen extra costs could add up to 30,600 for more than a fifth of home buyers.
Typically, if a purchaser cannot afford everything that they must pay for, they will take the extra cash needed out of long term savings (often around 60 per cent of the funds that they need), which may leave them in difficulty later on in life.
That leaves another 13,400 of which just over half, 63 per cent, is financed using credit in the shape of personal loans (15%), credit cards (27%) and extended mortgages (21%). For quite a few, these are long term debts, with just a third, 35%, paying them off in the first year. One fifth of home purchasers pay these debts off in conjunction with their mortgage payments.
These figures indicate exactly how vital it is on careful planning and sticking closely to a budget, especially at the start of buying a property. It's all too easy to overlook expenses and find themselves in a precarious financial position. New homeowners that are in deep debt cannot ride the storm of an economic downturn as well as those who are financially buoyant.
House buying and remodelling can be quite a rewarding and profitable exercise, when done properly and to a financial budget. Rapidly made decisions on must have properties, fixtures or fittings can leave you seriously out of pocket.
The home buyer's budget gap is symptomatic of a broader feature of the nation's money management characterised by a propensity to react to circumstances rather than plan ahead.
It's clear that many people are struggling to really take control when it comes to managing money.More than half of British adults would like to feel more in control of their money. That's not a surprise when you consider the complexity of modern personal finance, with most people operating more than five products but left largely to their own devices when it comes to the tools and guidance needed to really make the most of them.
With house prices predicted to stagnate and mortgage rates remaining relatively low, there are undoubtedly bargains to be had for home buyers who take the time to plan ahead.
Although it's always important to have funds put away, especially when mortgage lenders require such large deposits, don't overlook the costs involved in purchasing property - make sure you look over everything in detail and not just the price of the property.
