Many first-time buyers are unaware of the upfront costs they need to budget for before applying for a mortgage and purchasing a home, research suggests.
Research by Coventry for intermediaries in partnership with the Centre for Economics and Business Research , found that although 77% of first-time buyers were aware of legal fees, only 53% were aware of stamp duty costs and only 47% were aware of mortgage product fees before they applied for a mortgage.
This was particularly apparent for younger respondents, as only 19% of those aged between 18-24 were aware of mortgage product fees.
The research found that first-time buyers typically spend an average of £3,400 on upfront costs such as legal and valuation fees.
These, combined with the average spend on renovations and redecorating - £4,900 - means that buyers are spending £8,300 in extra costs associated with buying their house.
Collectively, first-time buyers are predicted to spend an annual total of £3.1bn on extra costs relating to the home purchase by 2025, meaning that on top of mortgage lending, they are set to contribute £74.1bn to the UK housing market in the next two years.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, said: “It's clear that people taking their first step onto the property ladder need more guidance and support during the mortgage journey, particularly around the costs associated with buying a home.
“With many younger buyers still unaware of some of the fundamental costs involved in purchasing a home, brokers are essential and because of their experience are in the best position to provide this vital information to ensure first time buyers are fully prepared for this financial and personal milestone.”