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New homebuyers shocked by financially fraught first year


2-year Discounted Lifetime Tracker mortgage makes months of extra expense easier
  •  44% of homeowners forget to budget for legal fees and stamp duty 
  •  Big bills hit 32% with a bang when boiler blows up 
  •  One in 10 women set to hear expensive patter of tiny feet in under a year
  •  Only 45% checking council tax band of potential new homes

House-hunters peering in estate agents' windows this spring are likely to face a financially fraught first year - shocked by basic financial oversights, unexpected bills and even babies. 

According to new research from Yorkshire Bank Mortgages, far from ending when the 'sold' sign goes up, many homeowners discover the drain on their pocket has only just begun.  Almost one in two (44%) admit they forgot to factor in legal fees, stamp duty and even a property survey. Fewer than one in ten (8%) put money aside for moving costs.

And the expenses of a new home do not end when the boxes are unpacked. Within the first year, one in three homeowners (32%) have had to replace or repair a broken cooker and one in eight (14%) have faced even larger bills when their boiler blew up. Adding to the expense, one in 10 women (10%) have become pregnant soon after moving in to their new home, according to Yorkshire Bank's study.

The research found that one in three new home owners (33%) were totally unprepared for the large amounts of cash they would have to continue to splash out over the coming months. It was conducted as part of Yorkshire Bank's development of its 2-year Discounted Lifetime Tracker. Guaranteed not to rise above the Bank of England base rate for two years, the mortgages have been designed to particularly help homeowners through the first few years of the extra expense of settling into a new home.
Gary Lumby, head of retail at Yorkshire Bank, said: "It is too easy to quickly move on to thoughts of redecorating and building a new conservatory as soon as the offer is accepted, failing to factor in all the costs of a new home. Overlooking costs such as surveys and stamp duty is asking for trouble when, as our survey suggests, there are likely to be less predictable expenses as well.

"Arranging a discount mortgage can help new homeowners deal with the expected and unexpected costs of a new home. Our 2-year Discounted Lifetime Tracker* may not help you predict when the power shower is about to give up, but by keeping your monthly mortgage payments low for a year or two, you may feel more confident that you can afford the replace it with an even better one."

Long-term expenses

Yorkshire Bank's research also found that many new homeowners may also be saddling themselves with high expenses more than a year after moving in. Despite the overhaul of the council tax bandings, only two in five (45%) found out which band their would-be home was in before they bought it. Perhaps more surprising, with higher fuel bills and energy efficiency measures being brought into HIPs (Home Information Packs), only 25% of homebuyers enquire what the previous occupant paid in utility bills.

Gary Lumby said: "Being hit by unexpected one-off costs in a new home can be difficult and annoying. But anyone buying a new house should also be are aware of the significant long-term costs they could be letting themselves in for, such as utility bills or council tax."

First home

Yorkshire Bank's research found when it comes to home buying surprises, it is an even greater shock for first-time buyers. Struggling to get onto the property ladder they now have to turn to friends and family for help when buying their first home - more than one in six (15%) admitted they borrowed money from family to cover the cost of a deposit.

Despite this struggle, many risk over stretching themselves during their first year in their new home as two in five (40%) intend to spend any spare cash on decorating the full house straight away.

Gary Lumby said: "First-time buyers particularly need to make sure they are aware of the full costs involved with buying their first home and don't try to over stretch themselves in the first year. If interest rates go up again, they could be particularly hard hit if they face larger monthly outgoings and have no leeway."

Making your mark

Yorkshire Bank's survey found that more than one in three new homeowners (39%) don't want to live with the reminder of the previous owners decor, therefore paying to redecorate is a price they are willing to pay as soon as they move in.  

Within the first year of living in a property, 76% of homeowners splash out on both a new kitchen and a new bathroom - at an average cost of £6,500.

Gary Lumby said: "Most homeowners are eager to make a mark on their property as soon as they move in. But it's important to include decorating costs in your budget before you start peeling off the wallpaper or ripping out a kitchen, otherwise you may not be able to afford to finish the job you started.

"To help avoid the short-term financial hassles and the larger long-term expenses, it's important for homebuyers to get their finances in order before they even start to look to move home. To help homebuyers, Yorkshire Bank is offering money makeovers, which can provide tailored financial solutions to suit everyone's needs."

Further information on Yorkshire Bank's range of discounted trackers, fixed rate, current account and offset mortgages, or further information about moving home, is available from Yorkshire Bank branches or its website at Both branches and the website offer, Home Information Guides, which are written especially for those thinking about buying a home, selling or renovating. There are useful hints on where to begin, what to avoid and the sorts of things which need to be considered.

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