Buyers 'Need To Consider Full Extent' Of Property Expenses
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Finance > Personal Finance
Oct 9, 2007
Steve_Smith
Buyers 'Need To Consider Full Extent' Of Property Expenses
Consumers considering purchasing a home also need to be aware of the various demands on their finances that they will have to deal with upon moving in, it has been suggested. According to research carried out by GE Money Home Lending, the average Briton moving into a new property is set to shell out 11,372 pounds - about 30 per cent of their annual income - on essentials such as stamp duty, moving-in costs, mortgage fees and utility bills during their first year in the home. And with such expenses coming on top of mortgage costs, those not factoring in such demands may find their ability to service areas of their finances - paying off credit cards and loans, for instance - is tightened. However, as the study also revealed that as the typical consumer is budgeting for such expenses to set them back by some 14,860 pounds, homeowners could be becoming more astute in handling their finances. Gerry Bell, head of mortgage marketing for GE Money Home Lending, said: "While the price of the property may be the major financial anxiety for buyers, they must also consider other expenses associated with the house purchase. At a time when interest rates have been steadily increasing, allowing oneself a financial buffer has never been as important". "It is reassuring to see that despite rising interest rates and general market turbulence, borrowers appear to have such a realistic outlook when it comes to how much their property is going to cost them - not just in terms of mortgage costs, but also in terms of the initial setting-up and moving-in costs and the ongoing household bills." Although mortgage responsibilities are a "hefty monthly outgoing" for consumers - taking up 22 per cent of first-time buyers' incomes - the financial services firm advised that day-to-day living costs must be factored in when creating a budget. Overall, running a household costs some 285 pounds per month - with council tax and utility bills taking up the largest percentage of outgoings. In addition, consumers were advised to be conscious of the cost of amenities such as internet access and telephone bills. Meanwhile, homeowners view moving-in and "setting-up" costs as setting them back by 6,086 pounds during their first year in a new home - although GE Money Home Lending sees this as actually costing 4,721 pounds. And although they looking to spend just under 1,600 pounds on soft furnishings, painting and decoration, the company suggested these expenses may actually surpass the 1,800 pounds mark. As a result consumers may wish to take out a home improvement loan as a way of helping them to meet such costs. After successfully meeting various demands on their finances in the initial stages of owning a home, those looking to further improve the value of their property may wish to take out a personal loan to help fund renovation projects. Earlier this month, a Halifax study showed that a quarter of homeowners have undertaken such improvements during the past 12 months, with the specific purpose of boosting the value of their property. According to the firm, redecorating and gardening are the two most popular renovation choices, with a competitively-priced home improvement loan a possible way of funding such plans.
Steve Smith writes for 1 Stop Finance Shop, where our visitors have access to all types of finance from payday loans and unsecured tenant loans, to self employed loans for homeowners.
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