Why Your Deposit Isn’t the Full Picture
When most first-time buyers think about saving for a new build home, they focus almost exclusively on the deposit — and with good reason. Building up a 5% or 10% deposit is a significant achievement that can take years of disciplined saving. But here’s what catches many first-time buyers off guard: the deposit is only one part of the total cost of buying a home.
Beyond the deposit, there’s a whole list of additional expenses that you’ll need to cover before, during, and shortly after your purchase. Solicitor fees, mortgage arrangement fees, property searches, buildings insurance, removal costs, and the not-insignificant expense of furnishing an empty new build home — these all add up quickly, and failing to budget for them can leave you financially stretched at the worst possible time.
The good news? Because these costs are predictable, you can plan for them in advance. This guide breaks down every additional cost you’re likely to encounter when buying a new build, with realistic figures at different price points. Whether you’re still in the early stages of saving for your deposit or you’ve already reserved a plot, understanding these costs now will help you avoid any nasty surprises later.
Legal and Conveyancing Costs
Your solicitor or licensed conveyancer handles all the legal work involved in your purchase. For a new build transaction, the costs tend to be slightly higher than for a standard resale property because the legal work is more complex — involving review of development-specific documents, management company details, and build warranty information.
Solicitor’s Fees
The solicitor’s own fee for handling your new build conveyancing typically ranges from £1,000 to £2,000 (plus VAT). This covers:
- Reviewing the contract pack from the developer’s solicitor
- Raising enquiries and negotiating contract terms on your behalf
- Conducting property searches (local authority, environmental, water and drainage, etc.)
- Handling the exchange of contracts and completion
- Registering your ownership with the Land Registry
- Submitting your Stamp Duty Land Tax return to HMRC
Disbursements (Searches and Third-Party Costs)
On top of the solicitor’s own fee, you’ll pay for various searches and third-party costs known as disbursements. These typically include:
| Disbursement | Typical Cost | What It Covers |
|---|---|---|
| Local authority search | £100–£300 | Planning history, building control, highways, and local plans |
| Environmental search | £30–£60 | Flood risk, contaminated land, ground stability |
| Water and drainage search | £30–£50 | Confirms connection to mains water and sewerage |
| Land Registry fee | £100–£300 | Registering your ownership (fee varies by property value) |
| Land Registry searches | £5–£15 | Title checks and bankruptcy searches |
| Bank transfer fees | £25–£50 per transfer | Sending completion funds electronically |
| Stamp duty administration | £0–£100 | Some solicitors charge for filing the SDLT return |
| Anti-money laundering checks | £10–£30 | Identity verification required by law |
In total, expect to pay £1,500 to £2,500 for all legal costs including disbursements and VAT. Some developers offer to contribute towards your legal fees as an incentive — if this is offered, it can significantly reduce your upfront costs. See our guide to developer incentives for first-time buyers for more on what might be available.
Do You Need a Survey for a New Build?
One cost that’s often debated for new build purchases is whether you need a property survey. Since the home is brand new and covered by a structural warranty (such as an NHBC Buildmark warranty), many buyers decide a full survey isn’t necessary. However, your mortgage lender will instruct a valuation (which is not the same as a survey) to confirm the property is worth the purchase price. This typically costs £250–£500, though some lenders include it as part of their mortgage deal. A separate snagging inspection after completion is generally more useful for new builds than a traditional survey.
Mortgage and Insurance Costs
Getting a mortgage involves several fees beyond the monthly repayments themselves. These upfront costs can be significant, so it’s important to factor them into your budget from the start.
Mortgage-Related Fees
- Mortgage arrangement fee: Also called a product fee or booking fee, this is charged by the lender for setting up your mortgage. It typically ranges from £0 to £2,000 depending on the mortgage product. Lower interest rate deals often come with higher arrangement fees, so you need to calculate whether paying the fee results in overall savings over the mortgage term. You can usually add this fee to your mortgage balance (though you’ll then pay interest on it).
- Mortgage valuation fee: The lender needs to confirm the property is worth the purchase price. This costs £0–£500 depending on the lender — many mortgage deals include a free valuation as part of the package.
- Mortgage broker fee: If you use a mortgage broker (which is recommended for first-time buyers), they may charge a fee for their services, typically £300–£500. Some brokers are fee-free and earn their income from lender commissions instead. Our guide to understanding mortgage offers explains more about working with brokers.
- Mortgage account fee: Some lenders charge a small fee (usually £100–£300) for administering your mortgage account. This is less common now but still exists with some products.
Insurance You’ll Need
Before your mortgage completes, you’ll need to have certain insurance policies in place. Some are mandatory (required by your lender), while others are strongly recommended:
- Buildings insurance (mandatory): Your mortgage lender will require you to have buildings insurance from the day of completion. For a new build, this is straightforward because the property is in pristine condition. Expect to pay £150–£400 per year depending on the property value and location. Note that if you’re buying a leasehold flat, buildings insurance is usually arranged by the management company and included in your service charge.
- Contents insurance (recommended): Covers your belongings against theft, fire, flood, and other damage. Costs vary widely based on the value of your possessions, but budget £100–£300 per year for a typical first home.
- Life insurance (recommended): While not legally required, most mortgage advisers strongly recommend life insurance that would pay off your mortgage if you were to die during the mortgage term. A basic decreasing term policy for a first-time buyer typically costs £10–£30 per month.
- Income protection insurance (optional): Covers your mortgage payments if you’re unable to work due to illness or injury. Costs vary but typically run to £30–£60 per month for a comprehensive policy.
Moving and Setting Up Your New Home
The costs don’t stop when you get the keys. Moving into a new build home comes with its own set of expenses, some of which are unique to brand-new properties.
Moving Day Costs
- Removal company: For a local move with a two or three-bedroom home’s worth of belongings, expect to pay £400–£1,000. Costs increase for longer distances or larger volumes. If you’re moving from a rental with minimal furniture, you might manage with a van hire (£50–£150 for the day) and some willing friends.
- Cleaning: If you’re leaving a rental property, you may need a professional end-of-tenancy clean to get your deposit back, costing £100–£300 depending on the size of the property.
- Disconnection and connection fees: You’ll need to set up utilities at your new address. While most connections are free, you might face small admin charges for broadband installation (£0–£60) or redirecting your post (£35–£65 through Royal Mail).
Furnishing a New Build
This is often the largest “hidden” cost that first-time buyers underestimate. A new build home is typically delivered as an empty shell — no curtains, no light fittings (beyond basic pendants), no garden landscaping, and obviously no furniture. Here’s a realistic breakdown of what you might spend:
| Item | Budget Option | Mid-Range | Premium |
|---|---|---|---|
| Bed frame and mattress | £300 | £600 | £1,200+ |
| Sofa | £300 | £700 | £1,500+ |
| Dining table and chairs | £150 | £400 | £800+ |
| Curtains or blinds (whole house) | £200 | £500 | £1,200+ |
| White goods (fridge, washing machine, etc.) | £600 | £1,200 | £2,500+ |
| Basic kitchenware and utensils | £100 | £250 | £500+ |
| Bedding, towels, and linens | £100 | £250 | £500+ |
| Light fittings | £50 | £150 | £400+ |
| Garden basics (if applicable) | £100 | £300 | £800+ |
| Approximate total | £1,900 | £4,350 | £9,400+ |
For a more detailed guide on furnishing your first home on a budget, see our dedicated article on furnishing your first new build on a budget. The key message is to prioritise essentials for the first few months (bed, sofa, basic kitchen items, window coverings for bedrooms) and then add to your home gradually over time. There’s no need to furnish every room on day one.
Complete Cost Breakdown at Different Price Points
To help you plan your budget realistically, here’s a comprehensive breakdown of all additional costs (beyond the deposit and monthly mortgage payments) at three common new build price points. These figures assume a first-time buyer with a 5% deposit.
| Cost Category | £250,000 Home | £350,000 Home | £450,000 Home |
|---|---|---|---|
| Deposit (5%) | £12,500 | £17,500 | £22,500 |
| Stamp duty (FTB relief) | £0 | £0 | £1,250 |
| Solicitor fees (inc. VAT) | £1,500 | £1,700 | £2,000 |
| Searches and disbursements | £350 | £400 | £450 |
| Mortgage arrangement fee | £999 | £999 | £999 |
| Mortgage valuation | £0 (free with deal) | £0 (free with deal) | £300 |
| Mortgage broker fee | £0 (fee-free broker) | £0 (fee-free broker) | £495 |
| Buildings insurance (first year) | £180 | £250 | £350 |
| Contents insurance (first year) | £120 | £150 | £200 |
| Removal costs | £400 | £500 | £600 |
| Essential furnishing | £2,500 | £3,500 | £5,000 |
| Utility setup and miscellaneous | £200 | £250 | £300 |
| Total additional costs (excl. deposit) | £6,249 | £7,749 | £11,944 |
| Grand total needed (incl. deposit) | £18,749 | £25,249 | £34,444 |
These figures are estimates and your actual costs may be higher or lower depending on your specific circumstances. However, they give you a realistic starting point for planning your savings. The key takeaway is that additional costs beyond the deposit typically range from £5,000 to £12,000 for most first-time buyers purchasing a new build.
Where Your Money Goes (on a £350,000 new build)
Figures based on a £350,000 new build purchase by a first-time buyer with 5% deposit.
Building a Contingency Fund
Beyond the known costs listed above, experienced homeowners will tell you that unexpected expenses always crop up. A boiler issue in the first winter, a need for additional storage solutions, or an appliance that needs replacing sooner than expected — life has a way of throwing curveballs just when your finances feel most stretched.
How Much Contingency Should You Set Aside?
Financial advisers typically recommend having a contingency fund of £1,000 to £3,000 over and above your known costs when you move into your first home. This might feel like an impossible ask when you’re already stretching to cover the deposit and additional costs, but even a small buffer can make a huge difference to your peace of mind.
For new build homes, the good news is that your property comes with a structural warranty (typically 10 years from an NHBC or similar provider), which means major structural issues are covered. However, the warranty doesn’t cover everything — cosmetic issues, appliance breakdowns, and general wear and tear are your responsibility from day one.
Practical Tips for Building Your Buffer
- Start small: Even £50 per month set aside in a separate savings account adds up to £600 over a year
- Use cashback and rewards: Many bank accounts and credit cards offer cashback on spending — redirect this to your contingency fund
- Delay non-essential purchases: You don’t need to furnish every room immediately. Live with the basics for the first few months and direct the money you would have spent into your contingency fund instead
- Keep your emergency fund separate: Use a dedicated savings account so you’re not tempted to dip into it for everyday spending
- Review after 6 months: Once you’ve settled in and have a clear picture of your monthly outgoings, you can adjust your contingency target
If you’re using a Lifetime ISA for your deposit, remember that the LISA can only be used for the property purchase itself. Your contingency fund needs to come from separate savings.
A 12-Month Savings Plan for All Costs
Planning your savings over a 12-month period can make the total amount feel much more manageable. Here’s a suggested month-by-month plan for saving the additional costs (beyond your deposit) for a £300,000 new build purchase. The total target is approximately £7,000 in additional costs.
| Month | Focus Area | Target Saving | Running Total |
|---|---|---|---|
| Month 1 | Start additional costs fund — set up a separate savings account | £600 | £600 |
| Month 2 | Research solicitor costs — get quotes and compare | £600 | £1,200 |
| Month 3 | Research mortgage products and understand the fees involved | £600 | £1,800 |
| Month 4 | Start a “furnishing fund” — begin looking at essentials | £600 | £2,400 |
| Month 5 | Get insurance quotes — compare buildings and contents policies | £600 | £3,000 |
| Month 6 | Halfway check — review progress and adjust if needed | £600 | £3,600 |
| Month 7 | Research removal companies — get quotes for moving day | £600 | £4,200 |
| Month 8 | Start buying small items for the new home (bedding, kitchenware) | £500 | £4,700 |
| Month 9 | Focus on furnishing essentials — look for deals and sales | £500 | £5,200 |
| Month 10 | Confirm solicitor appointment and pay initial fee if required | £500 | £5,700 |
| Month 11 | Final push — top up contingency fund | £500 | £6,200 |
| Month 12 | Completion month — ensure all funds are accessible | £800 | £7,000 |
This plan assumes you’re saving approximately £580 per month on average. If that’s more than you can manage, extend the timeline to 18 or 24 months and reduce the monthly amount accordingly. The important thing is to have a plan and stick to it.
Remember, this savings plan is in addition to whatever you’re saving for your deposit. If you’re finding it challenging to save for both, consider whether a shared ownership purchase might allow you to get onto the property ladder with a smaller deposit, freeing up more of your savings for additional costs. For a complete picture of the buying timeline and when each cost falls due, our first-time buyer timeline guide lays everything out in chronological order.
Frequently Asked Questions
How much extra should I save beyond my deposit for a new build?
As a general rule of thumb, budget for an additional £5,000 to £12,000 on top of your deposit when buying a new build home. The exact amount depends on the purchase price, your mortgage deal, and how much you plan to spend on furnishing. At the lower end (properties under £250,000), £5,000–£7,000 should cover legal fees, mortgage costs, insurance, moving, and basic furnishing. For more expensive properties or if you want a comprehensive furnishing budget, plan for closer to £10,000–£12,000. Having a detailed budget spreadsheet is the best way to avoid surprises.
Are solicitor fees higher for new build purchases?
Yes, solicitor fees for new build purchases are typically £200–£400 more than for a standard resale property. This is because new build conveyancing involves additional complexity — your solicitor needs to review development-specific documentation, check planning permissions, examine management company arrangements (for leasehold properties), verify the structural warranty, and review any special conditions in the developer’s contract. Despite the slightly higher cost, it’s essential to use a solicitor who is experienced with new build transactions rather than simply choosing the cheapest option available.
Can I add mortgage arrangement fees to my mortgage?
Yes, most mortgage lenders allow you to add the arrangement fee to your mortgage balance rather than paying it upfront. However, be aware that this means you’ll pay interest on the fee for the entire duration of your mortgage. For example, a £999 fee added to a 25-year mortgage at 4.5% would cost you approximately £1,700 in total over the life of the loan. Whether this is worthwhile depends on whether the lower interest rate you’re getting (by paying the fee) offsets the total cost. Your mortgage broker can calculate both scenarios for you to determine the cheapest overall option.
Do I need contents insurance from day one?
While contents insurance isn’t legally required or demanded by your mortgage lender, it’s strongly recommended from the day you start moving your belongings into the property. Even on moving day, you’ll have furniture, electronics, clothing, and personal items in the home that would be expensive to replace if something went wrong. Many insurers offer policies that can start on a specific date, so arrange your cover to begin on your completion day. The cost is relatively modest — typically £100–£300 per year for a new build — and the peace of mind is well worth it.
What new build costs can the developer help with?
Many developers offer financial incentives that can reduce your upfront costs. Common developer incentives include contributions towards your legal fees (saving £1,000–£2,000), stamp duty contributions, free flooring or window coverings, upgraded kitchen appliances, and occasionally white goods packages. Some developers also offer to pay your mortgage payments for the first few months. It’s always worth asking the sales adviser what incentives are currently available, as these can vary depending on the development, the time of year, and market conditions.
Planning Ahead Pays Off
Buying your first new build home is one of the most significant financial commitments you’ll ever make, and the deposit is only the beginning. By understanding and planning for all the additional costs — from legal fees and mortgage charges to insurance, moving expenses, and furnishing — you’ll be in a much stronger position to enjoy the experience without financial stress.
Start by creating a detailed budget that accounts for every cost category outlined in this guide. Set up a dedicated savings account for your additional costs fund, separate from your deposit savings. Take advantage of any developer incentives that are available to reduce your upfront expenses. And remember, you don’t need to furnish your entire home on day one — the essentials are all you need to get started, and you can build from there.
For more guidance on the financial side of buying your first home, explore our guides on saving for your deposit, optimising your credit score, and comparing the costs of renting versus buying. With careful planning and a realistic budget, you’ll be well-prepared for every stage of the journey from saving to moving in.