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How much should you budget when moving house? What are the average costs associated with moving?

23 Apr 2014

Zoopla, the property portal recently reported that the typical UK homebuyer spent £8,248 on the costs of moving to a new home which rose by 6% in 2013, according to Lloyds Bank.

How-much-should-you-budget-when-moving-house

Rising house prices was the main driver behind the rise in costs, impacting stamp duty, estate agency fees and legal fees, which all rose by 7 per cent in 2013.

Perhaps unsurprisingly, London had the highest average cost of moving in the UK, coming in at £20,825.

The Good News

Although the average cost of moving home has increased by 22% in the 10 years since 2003, average annual earnings have risen by 29% in the same period.  That translates to a fall of 1% in in the overall cost of moving as a percentage of earnings since 2003. 

So how much should you budget when moving?

We outline some basic costs here and give you the heads up about some things to watch out for that may cost you more in the long run!

1.  Stamp Duty

This is a tax on buying property and accounts for nearly half of all the moving costs on the average home. The amount charged depends on the purchase price of the property. Most buyers pay this tax, especially in London where the average price for property is well above the stamp duty threshold.

Purchase price/lease premium or transfer value

SDLT rate

Up to £125,000

Zero

Over £125,000 to £250,000

1%

Over £250,000 to £500,000

3%

Over £500,000 to £1 million

4%

Over £1 million to £2 million

5%

Over £2 million from 22 March 2012

7%

Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012

15%

If the value is above the payment threshold, SDLT is charged at the appropriate rate on the whole of the amount paid. For example, a house bought for £130,000 is charged at 1%, so £1,300 must be paid in SDLT. A house bought for £350,000 is charged at 3%, so SDLT of £10,500 is payable.

2.  Estate Agents fees

Typically estate agent's fees can vary between 1 to 3 per cent of the purchase price, plus 20% VAT, but every agent and every circumstance is different.  What you get for the fee you are charged may also vary.  For example some agent's may charge extra for advertising or for a premium service.   Also, some agents may charge a withdrawl fee if you remove your property from the market.  Read over terms and conditions carefully. 

Agents who charge lower fees may not also be the best value in the long run, for example, does the agent regularly achieve record prices or get multiple offers on properties they sell?  An agent who charges a higher fee may actually get you more money for your onward move, so although their fee may be higher, if you do your maths you may find you are actually better off paying a higher fee and attracting better buyers and achieving a higher asking price. 

Instructing an agent with a proven track record with various industry awards will also give you peace of mind that not only will you get a better price but also a higher quality of service which is important so that your sales has the best chance of proceeding to completion.  Don’t forget to factor in the cost in time and money of having a sale fall through!

If you are looking to buy or sell in the West London area, your local award-winning estate agent, Northfields can provide you with a free valuation, call on 0208 740 6622 to schedule an appointment.  We’ll be able to provide you with advice that may help you to budget for your move at the same time.

Ealing-Privelege-Card-10%-off

Not only that, but we now accept the Ealing Privilege Card, so if you are a card holder you can receive 10% off your selling fees when your present your valid card.  Click the link to find out more about saving money with Northfields using your Ealing Privilege Card or stop into one of our 3 Ealing offices to ask us about it.

3. Conveyancing Solicitors fees

The UK average cost of conveyancing is £850 according to the website reallymoving.com. However, the cost can range from £500 to £1,000. 

Lists of charges will typically include fees for the conveyancer's time, telephone and internet charges, letters and an indemnity fee, plus a contingency for unforeseen problems. On top of that there will be charges for disbursements.  Council and Land Registry fees for searches and for lodging title deeds will also be included.

There are some fixed rate deals available or online service providers who offer low cost conveyancing.  Be aware however, that sometimes these services are able to offer lower costs because they have large teams, handling hundreds of cases in a call centre model of business.  In this sort of low cost/high volume scenario, you may find a lack of personal contact which may become problematic if you need help.

Some solicitors offer a no-sale, no-fee service which means if your purchase or sale falls through, then you don’t have to pay anything.  As you might expect however, solicitors offering this type of service may charge more to compensate for those cases which do fall through.   

Ask friends or neighbours for recommendations for solicitors that they have used in the past.  At Northfields we have extensive experience with a wide variety of conveyancing solicitors.  As one of the big jobs an estate agent undertakes on your behalf is “sales progression” (meaning liaising with conveyancers to ensure the sale stays on track) we can recommend solicitors that we know provide high levels of customer service.  Customer service and communication has become increasing important as the process of speaking to lenders has become increasingly complex. To ensure a smooth move, most people will be better off hiring a professional who comes highly recommended.

Also, double check that the prices you’re quoted include VAT.  If not, add on another 20%.

4.  Energy Perfomance Certificate

The Energy Performance Certificate (EPC) is a legal requirement if you are selling or letting your home.  Much like appliances are rated for energy efficiency, homes are given a similar rating.

The colourful charts similar to what you would find on a refrigerator rate the energy efficiency of the property from A to G, with A being the most efficient.

Your property's environmental impact in terms of its carbon dioxide emissions is also measured.

The EPC will also contain suggestions of what you can do to reduce your home's energy use and carbon emissions, and a 'potential' rating to show what rating it could have if these recommendations are carried out. A third chart details an estimate of the annual cost of heating or lighting the property, for example, and the potential cost after improvements are made.

Whether you're getting an EPC because you're selling (or if you are a landlord and are letting a property) you'll need to contact an accredited Domestic Energy Assessor (DEA). You can find a DEA by searching online – the official register of assessors is searchable on the HCR Register website.

An EPC assessment can cost around £100-£150 for an average sized house, but prices will vary depending on the size of your home. If you are searching on the internet for EPC providers yourself don’t get caught out by bogus deals and check that the assessor you are thinking of using is a member of an accreditation scheme

At Northfields we can organise an EPC assessment on your behalf if you wish, which will take the guesswork out of finding a reliable and fully-qualified assessor.

5.  Mortgage Lender Charges

Anthony Cusack Resized
Anthony Cusack is an independent mortgage advisor who can help you figure out all the costs associated with your mortgage.

If you have an existing mortgage, dig out the terms and conditions and find out if the deal is transferable without exit fees. Some lenders charge exit fees (typically £150 to £300). If you are taking out a new mortgage, you’ll need to factor in arrangement fees (which could be up to £2,000).

Your mortgage lender will charge you a valuation fee (£175+). But remember, this is not a detailed survey, it simply checks the property is valued correctly.

If you are not sure what the mortgage lender charges might include in your case, ask our independent mortgage broker Anthony Cusack for his free advice.  You can call Anthony on 0208 280 9600.

6.  Surveyor's Costs

A homebuyer’s report carried out by a surveyor will throw up any serious defects; and a full structural survey provides a detailed report on the property’s construction. Having a more detailed survey is advisable as it could flag potential problems that could save you money in the long term, especially in older properties.  If major problems crop up you may also be able to renegotiate the sale price to cover the costs of repairs. Surveyors’ fees vary but as a guide a homebuyer’s report starts at around £400 and full structural surveys at £600 (depending on size of the property and state of repair).

7.  Removals Fees

There are a huge number of factors affecting the cost of a removal – area, how far you’re moving, time of year, day of the week, accessibility of your property, and how much you have that needs to be moved. On average, expect to pay from around £500 for a one bedroom flat to £2,000 for a five bedroom house.

Thinking of buying or selling?

If you are thinking of buying or selling property Northfields can help with everything from a free valuation to free advice, call 0208 740 6622 or request your free valuation online here.

Not quite ready to have a valuation yet? No problem, we can also offer advice via social media – Tweet us your question @Northfieldslive or ask for advice on our Facebook page.  We’re here for you. 

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