Closing costs explained: What homebuyers should expect in 2025

Buying a home is one of life’s biggest financial commitments. And while you may have saved for your deposit, it’s just as important to budget for the additional fees that come with finally closing the deal. From legal fees to stamp duty, these so-called ‘closing costs’ can really catch you off guard if you’re not fully prepared. Here are the most common closing costs, and how UK homebuyers can plan and budget for these unavoidable expenses and even take steps to minimise them.

What closing costs are and how they affect your budget

Closing costs refer to the fees and expenses that you pay when finalising a property purchase. These costs go beyond the property price and can include legal fees, taxes, and services. It doesn’t matter how old the property is – whether you’re purchasing a period property or one of the many new build homes available on the market, closing costs will apply. It’s important to budget ahead for these fees since they can typically amount to between 2% and 5% of a home’s total purchase price.

A breakdown of typical closing costs

Closing costs arise in a number of situations once you have completed purchase on a house. You can expect to pay for Stamp Duty Land Tax, solicitor fees, land registry charges, removal costs, and sometimes mortgage arrangement fees. Note that all these charges can vary depending on your location and the type of property. Also, new threshold changes to stamp duty mean that you will now pay tax on properties valued at £125,001-£250,000 (a band which was previously exempt)

Budgeting smart for closing costs in 2025?

While estimates vary, closing costs in 2025 are likely to fall between £3000 and £10,000, depending on your home’s value, location, and whether it’s leasehold or freehold – leasehold properties often have higher closing costs due to additional ground rent, leasehold management, and other fees. However, if you’re a first-time buyer, you may benefit from reliefs, particularly on stamp duty.

Smart ways to lower closing costs

Still, while closing costs are inevitable, they’re not necessarily set in stone. Take time to do some research and shop around for solicitors and removal companies. Also, don’t be afraid to negotiate mortgage arrangement fees. Use cost comparison tools such as CompareMyMove to get the best deal. And check if you qualify for government first-time buyer reliefs to help reduce your financial outlay.

Closing costs made manageable

Closing costs are an unavoidable part of buying a home, but with careful planning and a bit of research, you can stay in control of your budget. Understanding what to expect, and where you can save, will help you move forward with confidence and avoid last-minute financial surprises.