How to avoid any nasty surprises
How to budget for Stamp Duty
Stamp Duty’s a cost that’s all too easy to overlook when you’re sorting out your finances to buy property. Your mortgage lender, for instance, won’t step in to offer extra cash to cover it. This means you’ll have to make your own arrangements, setting aside what you’ll need in advance. While you’re at it, think about the other “hidden” costs of buying a home. Solicitor’s fees, removal bills and so on all need to be taken care of and budgeted for.
Working out beforehand what you’ll end up paying is absolutely essential here, to avoid some very nasty surprises down the line. You should also put some thought into what you could do to bring some of those costs down. As we’ve already discussed, buying a house that’s worth less than £300,000 as a first-timer means you won’t get lumbered with any Stamp Duty. Beyond that, you could potentially reduce your up-front deposit to help cover your SDLT charge – although you’d probably find it harder to get a good rate from a lender that way. A better approach in general would be to think of Stamp Duty as if it were an extra lump to pay alongside your deposit so you can work it into your budgeting from the start.
As for the budgeting itself, there are some basic strategies that can pay off pretty reliably. In fact, you should probably be using some of them anyway, just to keep control over your everyday finances. Bringing down any rent you’re paying can be a big help - perhaps by moving to a cheaper place while you save up a deposit, for instance.
As for basic money management, we’ve talked about the 50/30/20 rule and zero-based budgeting in a few of our other articles, and they’re definitely worth putting into action when you’re planning to buy property. You could also check out our guide, “Easy Ways to Save for a House on a Low Income”, which covers several other options you might want to consider.
Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.