June 16, 2010 19:00 ET

Swinton Reveals GBP 6.2 Billion Cost of Buying First Home

MANCHESTER, UNITED KINGDOM--(Marketwire - June 16, 2010) - As the latest reports reveal that house prices are still rising, first time buyers are facing costs of almost £180,0001 to purchase their first home, according to insurance broker, Swinton.

With current figures revealing that 347,0002 people took out a mortgage for the first time in the twelve months to February, combined with an average house price rise of £15,000 in the last year, the total annual cost of first home purchasing is setting Britons back an incredible £6.2 billion a year3.

The research, commissioned by Swinton home insurance, revealed that 34 per cent of first time buyers underestimated the extra costs of buying a house with almost two thirds of the people questioned only including furnishing and decorating as extras on top of the actual property price. Additional costs would include legal fees.

With the cost of buying home increasing Swinton is urging first time buyers to protect their investment by purchasing adequate contents insurance. First time buyers do not want to be left exposed with costly repairs if the building is damaged or if possessions need to be replaced due to theft or damage.

Steve Chelton, insurer development manager for Swinton home insurance, said: "Many first time buyers are rushing to get onto the property ladder due to the steep reduction in prices following the credit crunch. While this may seem like a good way to save money in the short term, we urge everybody to consider the additional costs such as legal fees, basic furnishings which can add up to over £8,000."

The research also found that over a quarter of first time buyers had gone over budget when purchasing their first property with some admitting to taking out a bank loan to finance the shortfall.

Steve Chelton added: "It's quite worrying that first time buyers aren't fully considering all of the costs before taking the important step of buying a property. We advise all prospective homeowners to fully consider the affordability of their dream home and to carry out full budget checks before making an offer."

Notes to Editors:

Average UK house price £169,162.00
Lenders valuation £180.00
Survey £400.00
Legal fees £550.00
Removals £100.00
Basic furnishing and decorating £7,000.00
Other fees £100.00
Total cost: £177,492.00
  2. Financial Research Survey from the market research firm GfK
  3. £177,492 x 327,000 = £61,589,724,000 = £6.2 billion

About Swinton

  • With 580 branches nationwide Swinton is the UK's largest high street insurance retailer
  • Unlike many other companies in the financial services industry, Swinton is committed to keeping its branches open for business, and part of the community
  • Swinton provides a one-stop-shop for the insurance and related needs of its clients, offering home, car, caravan, business, holiday, motorbike and even classic car insurance
  • With a dedicated team of advisors on hand at every branch to search a panel of insurers to offer quality cover at competitive rates

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