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The Hidden Costs of Buying a Home in Scotland: What First-Time Buyers Need to Know

Buying your first home in Scotland is an exciting milestone, but many first-time buyers underestimate the true cost of homeownership. Beyond the deposit and mortgage payments, several hidden costs can add up quickly. Understanding these expenses in advance can help you budget effectively and avoid unexpected financial strain.

In this guide, we break down the key hidden costs that first-time buyers in Scotland need to be aware of before making their move.

1. Deposit and Mortgage Fees

Most first-time buyers know they need a deposit, but there are additional mortgage-related fees to consider:

  • Deposit: In Scotland, lenders typically require a minimum deposit of 5% of the property price, but a higher deposit (10-20%) can secure better mortgage deals.
  • Arrangement Fees: Some mortgage lenders charge a fee to set up the mortgage, ranging from £0 to £2,000.
  • Valuation Fees: Some lenders require a valuation survey, costing between £150 and £1,500, depending on the property’s value.

If you pay over the home report, this amount must be paid in full. The lender only lends based on home report value or purchase price whichever is the lower. Please take advice on this before making an offer on a house. 

Tip: Some mortgage lenders offer fee-free deals, so it’s worth shopping around.

2. Land and Buildings Transaction Tax (LBTT)

Scotland has a property tax system called Land and Buildings Transaction Tax (LBTT), which replaces Stamp Duty in the rest of the UK.

  • First-time buyers in Scotland benefit from LBTT relief on properties up to £175,000.
  • If your home costs more than £175,000, LBTT applies as follows:
    • 2% on the portion between £175,000 – £250,000.
    • 5% on £250,000 – £325,000.
    • Higher rates apply to more expensive properties.

Example: If you buy a home for £200,000, you’ll pay 2% on £25,000 (£500 LBTT).

3. Legal and Conveyancing Fees

You’ll need a solicitor or conveyancer to handle the legal side of your purchase. In Scotland, this includes:

  • Missives: The legal exchange of contracts.
  • Searches: Checking for outstanding debts or property issues.
  • Land Register Fee: Updating ownership records.

Expect to pay between £800 and £2,000, depending on the complexity of the purchase.

4. Home Reports and Surveys

Unlike in England, Scottish home sellers must provide a Home Report, which includes:

  • Property valuation
  • Single survey (structural condition)
  • Energy Performance Certificate (EPC)

While this report helps buyers, you may still need additional surveys for older properties. A full structural survey can cost £500–£1,500.

5. Moving Costs

Moving into your new home comes with expenses, such as:

  • Removal services: £300–£1,500, depending on distance and furniture volume.
  • Van hire: £50–£200 for DIY moving.
  • Storage costs: If there’s a delay in moving, storage can cost £50–£150 per month.

Tip: Booking removals in advance can help secure lower prices.

6. Utility and Council Tax Set-Up

After moving in, you’ll need to set up utilities:

  • Electricity and Gas: Switching to a cheaper tariff can save money.
  • Broadband and TV: Installation fees (£30–£100) may apply.
  • Council Tax: Check your council tax band—first-time buyers often forget this cost.

7. Home Insurance Costs

Lenders require you to have building insurance, which covers structural damage. You may also want contents insurance for personal belongings.

  • Buildings insurance: £100–£300 per year.
  • Contents insurance: £50–£200 per year.

8. Maintenance and Repairs

New homeowners are responsible for maintenance and unexpected repairs, including:

  • Boiler servicing: £80–£150 annually.
  • Roof repairs: Can range from £200 for minor fixes to £5,000+ for major issues.
  • Plumbing and electrical work: Emergency call-outs can cost £100+.

Tip: Keeping an emergency fund for repairs is essential.

9. Factoring Fees (for Flats and New Builds)

If you buy a flat or new-build home, you may need to pay factoring fees for shared areas and services. These cover:

  • Building maintenance
  • Gardens and communal areas
  • Lift servicing

Costs range from £50 to £200 per month, depending on the property.

10. Mortgage Protection and Life Insurance

Many homeowners choose mortgage protection insurance to cover payments if they lose their job or become ill. Life insurance can also ensure your mortgage is paid off if anything happens to you.

  • Mortgage protection insurance: £10–£50 per month.
  • Life insurance: Varies depending on age and health but starts around £5–£30 per month.

11. Unexpected Costs and Contingency Planning

First-time buyers should always budget for unexpected expenses. Examples include:

  • New furniture and appliances (washing machines, fridges, beds).
  • Redecorating costs for paint, flooring, or wallpaper.
  • An emergency fund for sudden repairs.

Setting aside at least £2,000–£5,000 as a cushion can help manage these costs.

Conclusion

Buying a home in Scotland involves more than just your deposit and mortgage. From legal fees to maintenance and insurance, these hidden costs can quickly add up.

To avoid financial surprises:

✅ Research all costs before making an offer.
✅ Budget beyond your deposit to include legal fees, LBTT, and moving expenses.
✅ Keep an emergency fund for unexpected repairs and costs.

By planning, first-time buyers can step into homeownership with confidence and financial security.

FAQs

1. What is the biggest hidden cost of buying a home in Scotland?
Land and Buildings Transaction Tax (LBTT) can be a major unexpected cost, especially for properties over £175,000.

2. Do first-time buyers in Scotland pay LBTT?
Not on homes under £175,000. Above this amount, LBTT applies in tiers.

3. How much are legal fees for buying a home in Scotland?
Expect to pay between £800 and £2,000, depending on the solicitor and property value.

4. Are factoring fees mandatory in Scotland?
If your property has a factor, you must pay fees for shared maintenance. Check before purchasing.

5. How much should I save for unexpected homeownership costs?
It’s wise to set aside £2,000–£5,000 for unforeseen repairs and expenses.

Thinking of buying your first home in Scotland? Contact us today for expert guidance and mortgage advice tailored to you!

Disclaimer: Your home may be repossessed if you do not keep up repayments on your mortgage.