New home-buyers are being urged not to overlook extra costs that they might not factor into their annual expenditure when snapping up a property.
Though successful bids undoubtedly spark concerns about upcoming mortgage repayments, experts say that there are other, hidden, costs not always considered.
Aldermore Bank has warned that an extra £2,000 is spent during the first year of ownership after buyers have completed on their new home.
These costs are comprised of expenditure on decorating, improvement and unexpected repairs that aren’t always thought of as part the property’s price.
Another component of the extra costs is home insurance and these factors can combine with mortgage payments to bring the typical annual bill to almost £10,000, according to Aldermore’s experts.
Aldermore’s head of mortgages, Jon Cooper, told This is Money: “After years of saving for a deposit, first-time buyers may breathe a sigh of relief once they have been handed the keys to their property.
“Although they will have been focused on the end goal and achieving their dream, it’s important not to overlook the additional financial responsibilities that come with owning a home.
“So it’s important to budget for these additional expenses.”
The bank surveyed 2,500 aspiring homeowners and recent buyers and found that the greatest motivation to get on the property ladder was to stop paying a landlord rent.
And nearly two-thirds of aspiring first-time buyers told the survey that they’d be prepared to pay the extra hidden costs to escape rental spending.
It comes after the average rental price skyrocketed by almost 32 percent from £974 a month to £1,283 during the past three years, the Homelet Rental Index found.
Moneybox research painted a bleak picture for renters, saying that more than half of aspriing first-time buyers have delayed their home-buying plans.
Two-thirds of respondents to that research said that the cost of living has had an impact on their disposable income and made it tougher to scrape together savings for a deposit.
Being a home-owner, the research said, is still a priority for 82 percent of people.
Brian Byrnes, head of personal finance at Moneybox, said: “First-time buyer hopefuls have endured a sustained period of economic and mortgage market uncertainty yet despite this, the desire to own a home has increased significantly and remains their most important financial goal.
“In fact, so far this year we’ve seen a staggering 42 per cent increase in the number of new customers opening a Lifetime Isa.”
