The Hidden Cost Nobody Warns First Time Buyers About (And How to Avoid It)

Here’s the biggest mistake first-time buyers make: they save for their deposit, budget for their stamp duty, and plan for their mortgage repayments — and then completely forget about everything else. The result? They move in, and suddenly it’s beans on toast for a year before they can enjoy the lifestyle they had before buying.

This isn’t about your deposit, your stamp duty, or your mortgage repayments. You’ve got that covered. This is about the hidden costs — both monthly and upfront — that land with you once you’re a homeowner. Know them now, and you can budget properly and avoid any nasty surprises later.

We brought in our resident mortgage advisor, Gemma, to break it all down. Grab a notepad — this one’s worth doing properly.

Part One: Your Monthly Running Costs

Let’s imagine you’re buying a three-bed semi-detached home in the UK for £300,000. Here’s roughly what you’d be paying every month as a result:

Total: approximately £1,950 – £2,375 a month just to sustain your new living setup.

Is that doable for you? More or less than you expected? This is just part one — the essentials for the property itself. It doesn’t touch your actual lifestyle yet.

Note: these figures are based on an average £300,000 property. If you’re buying for more or less, ask ChatGPT (or a similar tool) to give you updated averages for your specific purchase price, and swap that figure in instead.

Part Two: Your Lifestyle Spending

This is where it gets personal — every household spends differently. Here are the categories worth thinking through:

• Food — including eating out
• Gym, hobbies & memberships — subscriptions add up faster than most people realise
• Motoring or travel costs — petrol, train fares, commuting
• Gifts, cards & Christmas — birthdays happen every month of the year
• Holidays or breaks away
• Savings goals — it’s fine to keep saving after you buy. Ambitious households aim for 20%, but don’t stress if that’s not realistic yet; it’s something to work towards
• Beauty and hair
• Clothes
• Childcare, clubs or schools — if applicable
• Home and furnishing budget — trips to IKEA, candles, plants, making the place feel like yours

There’s no point having the house you want if you don’t also have the lifestyle to go with it. Getting this budget right is what lets you afford both.

Your Homework

For the last six months, go through your bank statements and credit card bills and work out roughly what you’re spending in each of these categories. This tells you what your monthly budget genuinely needs to be to live as you currently do.

Worth knowing: your lifestyle often does shift once you own a home. Many buyers go out less (because friends come round to yours instead), so spending shifts around rather than simply increasing. Better to think this through now than adjust once you’re already in the property.

Do the Sum

Once you have your average monthly spend, grab your notepad again:

1. Write down your net income — what actually lands in your account each month (individually or combined)
2. Subtract your running costs (the £1,950–£2,375 figure, or your own personalised version)
3. Subtract your lifestyle spending (from your homework above)

If the result is negative, don’t panic — this is exactly what the exercise is for. It simply means you have some decisions to make: could you save a little less for now? Pause holidays for the first year or two? Cut back on a subscription or two you’re not really using? Every household — even existing homeowners — can benefit from this exercise, because we all spend on things we don’t fully notice.

Part Three: Upfront Costs to Budget For

Beyond your deposit and stamp duty, here are the one-off costs to plan for:

Mortgage arrangement/product fee Usually £999–£1,999. Some lenders let you add this to the loan, but you’ll pay interest on it for the life of the mortgage — pay it upfront if you can.

Broker fee Around £495 on average, if you use a mortgage advisor.

Valuation fee Sometimes free, sometimes £100–£200 depending on the lender.

Solicitor or conveyancer Expect £1,000–£1,800 depending on property value and complexity. This covers local authority searches, land registry fees, and bank transfer costs. Always get a written quote before work starts — your mortgage advisor can usually recommend trusted firms they’ve worked with before.

Independent survey £400–£1,500 depending on the level (Home Buyer Report vs. full structural survey). Remember: your lender’s valuation is for them, not you — a proper survey can save you a fortune if it uncovers issues before you buy.

Stamp duty As a first-time buyer, you’ll pay nothing on properties up to £300,000, 5% on the portion between £300,001–£500,000, and standard rates above £500,000. Always check the latest thresholds before budgeting, as these can change.

Removals £300–£1,000+ depending on distance and how much packing help you want. Doing it yourself? Factor in van hire, petrol, and packing materials — it adds up faster than expected. Recruiting friends and family is a solid budget option.

Utility connections Setting up gas, electricity, water, broadband, and council tax can come with installation/connection charges of £30–£100 per service. Pro tip: take photos of your meter readings on day one — it makes your first bills much easier to check.

Ground rent & service charges (flats/leasehold) Ground rent is being phased out for new leases, but service charges for communal areas, lifts, and maintenance still apply — typically £1,000–£3,000 a year for flats. Always ask your agent for a breakdown before you offer, as it affects your monthly affordability.

Furnishing & decorating That first trip to IKEA for mugs and tea towels is a rite of passage — but bigger basics (curtains, kettles, cleaning supplies) can run into several hundred pounds. Consider setting up a dedicated home-setup fund — even a few hundred pounds — so you’re not relying on credit cards to get settled.

Emergency & maintenance fund As a homeowner, boilers, appliances, and roofs are now your responsibility. A good rule of thumb: set aside around 1% of your property’s value each year for repairs and maintenance. On a £250,000 home, that’s about £2,500 a year. You won’t need it every year — but you’ll be glad it’s there when something breaks.

The Bottom Line

There’s a lot more to buying a home than saving your deposit. Knowing about these costs now — and planning for them — is what sets you up for success. The last thing you want is to move into your dream home unaware of the monthly commitments needed to keep it.

Plan early, stay in control, and you’ll move in feeling calm, prepared, and ready to actually enjoy your new home — right down to that first-night takeaway on the floor.

Transcript:

This is the biggest mistake you could make when you’re buying your first home.

Welcome back to this series, guys. And you are not going to love me for this episode, but you will thank me for it. It’s an important one — the extra and often hidden costs associated with buying your first home. This is the biggest mistake that first-time buyers make: not factoring this side of things in, moving in, and realizing that they have to have beans on toast for a year before they can really start enjoying the lifestyle they had before they bought their first property.

So, this video is about the other bills that are going to land with you. Not your deposit, not your stamp duty, not your first mortgage repayments — I know you’ve got that nailed. It’s the hidden costs, both monthly and upfront, and I’m going to need you to know about them so you can budget properly and avoid any nasty surprises later.

So, this is not going to be just a watching episode. This is an interactive episode. You’re going to get your notepad and pen. I’m going to get my whiteboard, which I’m very excited about. And we’re going to bring in our resident mortgage advisor, Gemma, to go through all the hidden costs, so you’re not going to have any secrets after this. Let’s get stuck in.

Right, whiteboard is ready. Get your pens out. We are now going to look at your monthly budget that you’re likely going to need as a new homeowner. So, let’s imagine that you buy a three-bed semi-detached home in the UK for £300,000. Here are your average costs that you’d be paying every month as a result.

So, on average, your mortgage is likely to cost around £1,400 to £1,550 per calendar month. You’re going to want to budget for some protection insurance — let’s say £140 to £200 a month. And then we’ve got the all-important council tax, £170 to £220 depending on the area and the type of property. We’ve also got to think about gas, electricity, and water — all those essential utilities. Let’s allow £200 to £280 in our budget for that. You’re going to need to insure your home, so buildings and contents insurance we’ll put at £25 to £40 a month. And then we’ve got your TV licence, which you do still need, especially if you’re going to watch things like BBC iPlayer, and that comes in at around an average of £15 a month. And where would we be without broadband and streaming services? Absolutely essential for these households these days, so we’ll allow £45 to £70 a month for that.

So, that’s an approximate total of £1,950 to £2,375 a month to sustain your new living setup. Is that doable for you? Is that more or less than you can afford? Because this is part one — we need to reset.

So, for part two, we’re going to talk about what you spend each month, and that is different for every household. Now, remember, this is for an average of a £300,000 property in the UK. If you’re not looking at buying a £300,000 house — maybe you’re buying for less, maybe you’re buying for more — you can go on to ChatGPT and ask it to give you new averages based on your new purchase price, and then you can replace this £2,375 with that figure.

So that’s part one. This £2,375 has only covered your needs when it comes to your property, but it hasn’t touched on your lifestyle yet. And that’s what we’re going to look at now. So Gemma and I are going to work together here to give you an idea of the different things you might be spending your money on.

“Food.” “Food.” “Oh, you were just going to say that, weren’t you?” “I was just about to say food. Everyone’s got to eat.” [laughter]

Okay. And eating out as well, because I don’t know about you, but there should be a budget for that. Perhaps also popping in there anything like a gym or hobbies that you like to pay out for regularly.

“Yeah, memberships and subscriptions, I think we’ll put there, because we’ve all got more of those than we probably realize, actually.”

It’s very true. So that’s things like your Netflix, Amazon Prime, any other subscriptions you might have. Motoring costs — let’s think about petrol or train fares.

“Travel, especially if you’re commuting.”

I would say gifts, cards — birthdays seem to happen every month of the year. Certain months are busier than others — I don’t know about you, July is mine. So birthdays and gifts and cards and Christmas — these are things that you can put a little bit of money aside for each month if you want to be really organized. But I’ll talk about how you can budget better in another episode in more detail.

Let’s think about holidays or breaks away that people might want to have in the year. Things like savings goals — people don’t necessarily want to stop saving when they buy a house. It’s always good to aim, if you can, for 20%. Now that is ambitious for lots of households, especially if you’re just buying, so don’t get too attached to that — that’s something to work towards for the future.

Okay, then we’ve got beauty, hair —

“We want you to still have a lifestyle you enjoy. There’s no point having the house that you want, but not the lifestyle too. And getting this budget right is so important to allowing you to have the life that you want and are accustomed to, whilst being able to afford your home.”

I’m going to add clothes here, because people want new things to wear. For some first-time buyers, there might be some childcare costs, clubs, schools, depending if you’ve got dependents that you’re paying out for as well. And also, you’re going to be very excited about this space — you’re going to want to furnish it, you’re going to want to have regular trips to IKEA, you’re going to want to buy a candle and make it look lovely, and plants. So you want a little bit of a home budget as well.

Okay, so we’ve covered lots of topics here, but you might find a few more that we’ve missed — so put it in the comments, help us out a bit. What else would fit into here for you?

This is stage two — becoming aware. And the best thing that you can do — and this is where your notepad, your phone, and access to your online banking is going to be really important — I’ve got some homework for you. For the last six months on average, what are you spending on these categories? Go through your credit card bill, go through your bank statement, and see if you can average what you’re spending, so that you know roughly what your monthly budget would need to be to live as you are already.

Now, I will say, when you buy your first home, your lifestyle does change. If you’re anything like I was, we went out less because I wanted everyone to come around my house and come for dinner parties, and my food bill might have gone up, but my going-out bill went down. So you can make adjustments, but it’s better to do it now than when you’re in the property.

So, having done that, you’re now going to have a figure which combines all of your average spending over the last six months, or what you think you spend on your categories. Now, I need your notepad and pen for me, because I’m going to get you to write down your net income. So this is the money you are paid into your bank account every single month — how much is that total, whether it’s on your own or together. And then you need to take that net figure minus the figure it’s going to cost you to run your house — this might be this figure, or it might be the one that you created for yourself in ChatGPT — and then take away this figure, which is how you live, and that’s going to give you, hopefully, a total.

Now, it might give you a minus. I don’t want you to panic if that happens, because this is just an exercise that we’re doing — we’re learning here together. And if it is a minus, or it’s tight, or there’s not enough in the pot for all of this to happen, it just means that you might have a little bit of an exercise to do. So, which of these things could you spend less on? Whether that’s saving a little bit less, or perhaps you’ll decide not to have holidays for the first few years of home ownership, or perhaps you won’t be buying any presents [laughter] for your friends and family — hopefully not that one. But there will be things you can do.

And let me tell you, every household, even homeowners, can do this exercise and benefit from it, because we all spend money on things we do not even realize. For me, it’s the subscriptions — sometimes you are paying for things that you no longer use. So check out what you’re paying for each month — it might be a really healthy exercise to do that.

There’s going to be more videos like this, so do comment and let us know if this is helpful to you, if you need it broken down differently, because we’re going to be talking to you in the future about saving hacks, things that you can do when you move into a property with a low budget, and monthly management in general of your money.

So, now we’ve prepared ourselves for the typical monthly costs of being a new homeowner, and your notepad is full of information. Let’s look at the upfront costs you need to save for, alongside your deposit and possibly stamp duty. And for this, I’m going to hand back over to our resident mortgage advisor, Jim.

Most mortgages come with an arrangement or product fee, which is usually between £999 and £1,999. Some lenders will let you add this to the loan, but remember, you’ll pay interest on it for the life of the mortgage, so if you can pay it upfront, do. You might also have a broker fee to your mortgage advisor, and that could be around £495 on average. Valuation fees can be free and included, but for some lenders that could be around £100 to £200. Your advisor will tell you exactly which apply to your product.

So, you’re going to need a solicitor or a conveyancer — both the same thing — to handle the legal side of your purchase, checking contracts, carrying out searches, and making sure everything is legally sound. You should expect to pay around £1,000 to £1,800 depending on the property value and complexity. That’s going to cover things like local authority searches, land registry fees, and bank transfer costs. Always get a written quote before your solicitors start, so there are no surprises later. Your mortgage advisor can also recommend trusted solicitor firms that they’ve worked with before, and it can really help to have a team that communicates really well.

As we covered in a previous episode, your lender’s valuation isn’t always enough — it’s for them, not you. You may want, and I highly recommend, as you probably guessed by now because I keep repeating it, you may want to get your own independent survey for peace of mind. And depending on the level, whether you go Home Buyer’s or full structural, that could be £400 to £1,500. But remember, it can save you a fortune if it uncovers issues before you buy.

If you’re a first-time buyer, you’ll pay no stamp duty on properties up to £300,000, and 5% on the portion between £300,001 and £500,000. Over £500,000, you’ll pay standard rates. If your property is under £300,000, there is nothing to pay, but always check the latest thresholds before you budget.

Once you’ve completed, there’s the physical move, and you might want to hire a removal company. Some will even pack your boxes for you and make them nice and organized, and they can cost anywhere from £300 to £1,000 plus, depending on how much you’re moving, how far, and how organized you want them to be on your behalf. If you are doing it yourself, you’re going to probably need to hire a van, and that’s going to cost petrol, and you’re going to need packing materials — this sort of thing adds up faster than you think. My advice would be to recruit friends and family for your move-in day.

When you move in, don’t forget to set up your gas, electricity, water, broadband, and your council tax. Some of those might have an installation or a connection charge, and that can range from £30 to £100 a service. A pro tip on this: take meter readings and photograph them on day one — it will make your first bills so much easier to check.

If you’re buying a flat or a leasehold property, don’t forget about ground rent, which is being phased out for new leases, and service charges for communal areas, lifts, or maintenance. These vary widely, but for flats, expect anywhere from £1,000 to £3,000 a year. Always ask your agent for a breakdown before you make an offer, as it forms part of your monthly affordability.

Once you’ve moved in, it’s time for the fun part — furnishing and decorating. That first trip to IKEA to stock up on new mugs and tea towels is a very special, iconic moment. But bear in mind that the bigger basics — curtains, kettles, cleaning supplies — can cost several hundred. So I would recommend creating a home-setup fund, ideally a few hundred pounds put away in a savings account, so you can get settled without relying on credit cards.

Your first night in your new home is one you will never forget. One of our traditions is always eating fish and chips from the local shop on the floor, still in the paper — I don’t know where it came from, but we do it every time. And when we moved into our first house, we even put up our Christmas tree before any furniture arrived. It was December — it wasn’t as weird as it sounds. So tell me in the comments, what will be your first-night tradition? I would love to know.

We don’t want to forget about emergencies and maintenance. Owning a home does mean that you are now the one responsible for it — boilers, appliances, roofs, they all need care. I know they’re not the fun stuff, but they are the important ones. A good rule of thumb is to set aside around 1% of your property’s value every year for repairs and maintenance. So, if your home costs £250,000, aim for about £2,500 per year. You won’t need it every year, but when something breaks, you’ll be glad to have this pot to fall back on.

So, you’ve made it to the end of this video. So, do you love me or do you hate me for it? The fact is, whether you love me or hate me, there is a lot more to buying a home than just saving your deposit. And knowing about it now and planning for it is setting yourself up for success. The last thing you want is to be sitting in your dream home unaware of the monthly commitments that are needed to keep it. But now you’ve watched this, you know what to expect. You’re going to plan early, stay in control, and move in feeling calm, prepared, and excited for your fish and chips on the floor and your brand new tea towels.

This is On the Ladder, and you just took the next step, and you are one step closer to your dream home. Hit subscribe — I want to be with you every step of the way, and I’ll see you next time.