First-Time Buyers Face Unexpected Financial Strain from Overlooked Moving Costs
Mortgage expert Jen Lloyd has issued a stark warning to aspiring homeowners about the wave of hidden expenses that frequently catch first-time buyers off guard. Lloyd, head of mortgages at Skipton Building Society, emphasised that while many meticulously budget for the purchase price, they often underestimate the substantial costs associated with actually moving into a new property.
Survey Highlights Widespread Financial Surprises
The caution comes following a comprehensive survey of 1,000 first-time buyers, which revealed that dealing with multiple upfront expenses in a short timeframe was the most dreaded aspect of the homebuying process. Lloyd explained, "People budget meticulously for the purchase price but are often caught off guard by everything that comes with actually moving in. Rent overlap, stamp duty, removals, council tax, furnishings and set-up costs can all land at once."
According to the research, among the 64% of buyers who were renting at the point of purchase, a significant 35% ended up paying both rent and a mortgage simultaneously. For 8% of these individuals, this financial overlap extended beyond three months, creating considerable strain. Additionally, 24% had to terminate their rental agreements before securing a completion date, while 23% expressed concerns about potentially being left without accommodation during the transition period.
The Perils of Rushing the Process
Lloyd also warned against the common mistake of attempting to accomplish everything at once, a pattern she frequently observes among eager first-time buyers. "From surveys to furnishing a home from scratch to removals and renovations, it's easy to feel like every decision has to be made immediately – and rushing often leads to unnecessary spending and avoidable stress," she noted.
She advised prospective homeowners to adopt a more measured approach, stating, "Buying your first home is exciting, so it's natural to want everything done as quickly as possible. But slowing things down where you can, and prioritising what genuinely needs doing now versus what can wait, usually saves money, time and a lot of anxiety."
Practical Solutions and Mortgage Innovations
To help alleviate some of the immediate financial pressure, Skipton Building Society has enhanced its Delayed Start Mortgage product. This innovative option allows first-time buyers to postpone their initial mortgage repayment for up to three months after completion. Lloyd highlighted, "We've enhanced our Delayed Start Mortgage to give buyers greater flexibility around when their repayments begin, whether that's one, two or three months after completion, helping to ease some of the immediate pressure."
This feature can also be combined with the society's 100% Track Record Mortgage, which recognises strong rental payment history and eliminates the need for a traditional deposit. Lloyd emphasised, "Everyone's route onto the property ladder is different, and offering fairer options that reflect those individual circumstances can help make the move into homeownership feel far more manageable."
Essential Tips for Navigating the Homebuying Journey
Based on the survey findings and expert advice, here are crucial recommendations for first-time buyers to avoid costly mistakes:
- Accurately Budget for Initial Months: The most significant financial shock often stems not from the deposit but from the cluster of concurrent costs including rent overlap, legal fees, removals, furnishings, and set-up expenses. Research these early and build a realistic "move-in buffer" to reduce stress.
- Avoid Overwhelm by Prioritising Tasks: Resist the urge to tackle everything simultaneously. Carefully distinguish between urgent actions and those that can be deferred. A slower, more deliberate approach typically conserves both finances and mental wellbeing.
- Consider Total Monthly Outgoings: Focusing solely on mortgage repayments can create a misleading impression of affordability. Incorporate council tax, utilities, insurance, service charges, and ongoing maintenance to establish a comprehensive monthly budget before making an offer.
- Protect Your Credit Score: Refrain from acquiring new credit in the months preceding a mortgage application and settle outstanding debts where feasible. Even minor commitments, such as mobile phone upgrades, can impact affordability assessments.
- Organise Documentation Promptly: Missing paperwork remains a primary cause of delays. Having payslips, bank statements, identification, and proof of deposit prepared from the outset can accelerate the process and provide a competitive advantage.
Beyond financial concerns, the survey identified additional frustrations including the physical demands of moving, the protracted gap between exchange and completion, and the obsessive monitoring of property applications "as if it was a full-time job." By heeding this expert guidance and planning meticulously, first-time buyers can transform what should be an exciting milestone into a more manageable and financially secure experience.
