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Nine in ten homebuyers go over budget

Tuesday, 20 March 2007 12:00 AM

Nine out of ten Brits go over budget by at least £20,000 when buying a new home, new research shows.

The study from Findaproperty.com reveals one in five says they overspend by £50,000 when buying a new home.

An inability to work out how much renovations will cost on a new property sees 46 per cent of Brits financially overstretched.

Around a third of buyers go over budget because of stamp duty, with legal fees, furniture costs and removal costs the other top reasons for spending more than planned.

"Unlike other financial matters, when it comes to searching for a new home, buyers are led by their hearts - not their heads," commented Mike O'Flynn of FindaProperty.

"If you're considering renovating a potential new home, it's important to get professional quotes so you understand the full costs involved, before taking the plunge and making an offer."

The study also shows it is not just buyers who go over budget when moving home, 77 per cent renters say they go over budget by £500, with a further eight per cent overspending by more than £1,000.

FindaProperty's golden rules for working out the costs of moving home

  • Renovations - Be realistic when planning your dream home. If you walk into a house and are immediately planning a new kitchen and bathroom refit, then factor this in.

Minimum to budget: from £5,000 upwards.

  • Stamp duty - A non-negotiable part of purchasing a home and a cost many first-time buyers forget to factor in.

Minimum to budget: based on average house prices this can vary between £2,161, in the south-east for example, to a staggering £9,489 in London.

  • Legal fees - These tend to vary on a sliding scale, dependent on the value of your new home.

Minimum to budget: from £550, though this could raise to a few thousand on more expensive properties.

  • Furniture - The one subjective cost you can directly influence. Remember that your interior décor can be built up and added to over time. Do not try to cover everything in a one stop shop.

Minimum to budget: for basics - bedroom and living room furnishings as well as kitchen appliances - from £3,000.

  • Removal costs - Removal companies increasingly offer tailored services, taking into account your budget, size of your home and distance to travel. Approach them honestly and ask their advice.

Minimum to budget: from £200 - £1,000.

  • Keep a few pennies in the kitty - It is a good idea to set money aside for local searches and land registry fees, building and contents insurance, in addition to basic moving in costs such as plumbing in the washing machine, new keys, redirecting mail - and of course your moving in party.

Minimum to budget: from £300 upwards.

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