Majority of FTBs overestimate conveyancing costs
New research has found that first time buyers are confused about the house buying process, with many misjudging costs and unaware of the differing responsibilities property professionals have.
According to Reallymoving.com, first time buyers are vastly over-estimating the cost of conveyancing, with 69% guessing they’d have to fork out £1,500 in solicitors fees on a £250,000 property. This is more than double the average of £550 charged for a property of this value.
The survey, which looked at the views 500 people intending to buy their first home within the next three years, also found that most buyers were unsure about the different roles which property professionals play within the transaction process. For example, when asked who conducts the searches, over two thirds (67%) believed that the surveyor or estate agent carried this out. Just a third identified that this was, in fact, the responsibility of the conveyancer.
Stamp duty was also a source of confusion, with 24% under the impression that the tax was paid by the seller, whilst an additional 7.5% believed it was a charge from the solicitor.
Terminology used within the process also proved tricky for respondents, with just over half (55%) understanding the true meaning of ‘exchange’, with just over a third (37%) believing it’s the date they collect the keys and move into the property.
Commenting on the research was CEO of Reallymoving.com, Rob Houghton. He stated: “Failure to grasp the fundamentals of the home-buying process will create big problems for first time buyers and could lead to unexpected costs and transactions falling through. Buying a property is rarely straightforward, but it is in the best interests of First Time Buyers to ensure they are as well prepared as possible, with a good understanding of the different roles of the professionals involved, who pays for what and the likely costs.
“First Time Buyer activity is surging this year, thanks to changes to stamp duty and the huge popularity of Government schemes such as Help To Buy, so it’s more important than ever that they are going into the process with their eyes open.”