Initial costs typically include:
- Any lease 'premium' (the purchase price).
- Your own legal fees. The landlord will often want you to pay their legal fees, though you may be able to negotiate on this point.
- Other professional fees - for example, the cost of a survey.
- Stamp duty land tax.
- Land registry fees of up to £700.
- Any security deposit you are required to make - again subject to negotiation.
- The first period's rent. When taking a lease part way through a rent period, this initial payment may need to cover both the unexpired portion of that period and the whole of the next period.
Taking a simple licence is generally less expensive, with initial costs restricted to your legal fees, an administrative charge to cover the landlord's costs, and any deposit you make.
Depending on the amounts involved and the way the transaction is structured, there may also be VAT implications for the premium and/or the rent which you need to understand.
