First-time buyers are being hit by an inflationary double whammy – after years of rising property prices, new research out today reveals the nation’s new property owners are forking out almost £3 billion just to move into their first home.

The extra expense of almost £6,000 per buyer on items such as legal bills, tax, removals and basic furnishings comes as a surprise to most first-time buyers. In fact, almost nine in 10 admit they underestimate the amount needed to cover costs on top of the actual property price.

Norwich Union’s study amongst almost 900 first-time buyers reveals that while 94 per cent set a strict budget when embarking on the hunt for their first home, a quarter end up going over budget – with the average overspend being more than £10,000.

But this doesn’t come as a surprise to the nation’s estate agents. The insurer spoke to 250 estate agents and eight out of 10 said that first timers always underestimate the costs associated with buying a property.

And a quarter of all agents admit dealing with first time buyers is frustrating and time consuming.

Phil Spencer, expert house finder and presenter of Channel Four’s Location, Location, Location, says it’s not unusual for new buyers to dwell on property prices and neglect these hidden extras.

“It’s easy for them to get fixated on property prices and overlook the cost of moving in. And yet, as the survey shows, these costs are often high and first-time buyers may end up having to borrow even more money on top of their mortgage.

“It pays to be prepared and well organised and I always encourage new buyers to consider every expense, investigate the various costs and set their budgets accordingly.”

The Norwich Union study also reveals house-hunters often have a reality check when they start house hunting – almost half of them had to lower their expectations once they starting looking and realised the real cost of property.

But it seems that once they’ve seen their dream home, it takes just minutes for first time buyers to decide that it’s ‘the one’ – half make up their mind in under five minutes of walking through the front door.

To help people getting on the property ladder, Norwich Union has launched the insurance industry’s first home package tailored to meet the needs of first time buyers.

Norwich Union’s product feature include a low start contents sum insured, a fixed price for the first two years and a number of money saving offers from leading home suppliers.

Jill Willis, market development manager at Norwich Union, said: “Buying a home for the first time can be quite a daunting and expensive time. There are all sorts of things to do and remember and choices to be made.”

“As our research shows, people are often on a very tight budget – or in fact over-spending. We’ve worked hard to take some of the hassle away from first time buyers by developing this all-round package, which not only provides insurance but also gives a whole host of other benefits with cost saving and simplicity in mind.”