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The cost of moving house – and how you can make savings
Thinking about moving house? It’s important to consider the real cost of moving house and what to budget for. According to MoneySuperMarket, the average Briton moves home more than five times in the course of their life. Staggeringly, the company’s recent survey also reveals that the average cost of moving house has increased by 12 per cent over the last year, from £671 to £748. And, that doesn’t include stamp duty, estate agency fees or legal fees.
So in order that you don’t get any nasty surprises, we’ve come up with this essential guide, covering everything you need to know about legal fees, conveyancing, stamp duty and surveyor costs. We’ve also found some clever ways to cut the cost of moving. Let’s start with the main things you can expect to pay out for.
The cost of moving house – what can you expect to pay
To help you budget, we uncover average moving costs you need to consider on your moving house checklist, whether you’re a first-time buyer or moving to a new home.
Image credit: Foxtons
‘The cost of moving house is a well-known challenge for Brits. What is less well known are those additional costs,’ says Jo Thornhill, Money Expert at MoneySuperMarket.
‘If you are considering moving, factor in things like cleaning, new household items, temporary storage space and professional movers to make sure your treasured possessions get from A to B safely, too,’ says Jo.
1. Conveyancing
This is when you hire a solicitor to act for you when buying or selling a property and will, on average, cost between £500 and £1,500 (including VAT at 20%) depending on the type of property you are buying. They will also conduct local searches, which will cost you between £250 and £300.
If you’re selling a house at the same time, you may be able to negotiate a package deal with the solicitor.
When searching for a solicitor, a personal recommendation goes a long way – ask friends and family if they can put you in touch with a firm they enjoyed good service from. If you’re hunting for a solicitor yourself, make sure they are accredited by the Solicitors Regulation Authority.
2. Estate agent’s fees
Agents work on commission and you can expect them to charge between 1 per cent to 3 per cent of the price of your house sale (this is only paid by sellers, not buyers). Remember to add 20 per cent VAT to this amount. Choosing a sole agent will decrease the amount of commission you pay, but may limit the amount of people that will view your house.
In terms of fees, estate agents charge a percentage fee, which can be anywhere between 0.75 per cent and 3 per cent plus VAT of the agreed selling price for your home, depending on the type of contract you opt for.
To save money, some sellers choose to advertise their home through independent websites, but you’ll have to put the work in yourself and arrange viewings, and there will be a small fee to join the site. Don’t be shy about negotiating fees, most agents are prepared to be flexible.
3. Stamp duty
Stamp Duty Land Tax (SDLT) is a tax paid on buying a home in England and Northern Ireland. In Scotland, it’s called the Land and Buildings Transaction Tax (LBTT) and, in Wales, it’s called a Land Transaction Tax (LTT).
‘Rates vary between the different countries. However, essentially what you need to know is that Stamp Duty is calculated on the property’s value, paid at the point of completion. You have to raise that money yourself, meaning it can’t be a part of your mortgage or loan,’ advises David Jabbari, CEO of UK conveyancers Muve.
When buying a property in England that you’re planning to live in (and you’ve owned a property before) you’ll pay the following rates on each portion of the property price:
- Property price bracket: £0-£125,000
Stamp duty rate: No stamp duty payable - Property price bracket: £125,001-£250,000
Stamp duty rate: 2 per cent - Property price bracket: £250,001-£925,000
Stamp duty rate: 5 per cent - Property price bracket: £925,001-£1.5 million
Stamp duty rate: 10 per cent - Property price bracket: Over £1.5 million
Stamp duty rate: 12 per cent
For example, the stamp duty on a £300,000 property would be £5,000. The tax rate is 1.7 per cent.
Today, the current SDLT threshold is £125,000 for residential properties (both freehold and leasehold and when buying a property through a shared ownership scheme) and, due to changes announced by the government, rates will now now apply only to that part of the property price that falls within each band.
First-time buyers don’t have to pay stamp duty on a property up to £300,000. Anything over £300,001 and under £500,000, a five per cent tax needs to be paid. If you’re buying a property over £500,000, you cannot claim the relief and have to follow the rates as above. For help calculating the cost, use the HMRC online stamp duty calculator.
Image credit: Future Plc
4. Deposit
A deposit is a percentage of the property price that is paid upfront, with the remaining amount borrowed as a mortgage. In most cases this is between 10 and 15 per cent of the property value. ‘The more deposit you put down, the less mortgage you will need to borrow,’ says Dave Sayce, Founder and Director at Compare My Move.
There are 95 per cent mortgages available, requiring only a five per cent deposit. However, these are likely to have a higher interest rate. ‘The higher your deposit, the cheaper your mortgage repayments become,’ explains Dave.
5. Valuation fee
When you apply for a mortgage, the lender will carry out a house valuation on the property to ensure its worth roughly what you’re paying for it. Sometimes these are free, but generally cost between £200 and £300.
This valuation is far from thorough and sometimes won’t even involve anyone visiting the home in person. To ensure you’re paying a fair price for your home, make sure the independent survey you instruct includes a valuation.
6. Surveyor’s fee
Before the sale goes through, you need to have your property checked by a surveyor. This flags up if there are any structural issues with the property. You can pay anything from £250 to £600 plus for different surveys, which differ in detail.
There are three types of surveys: a Condition Report, a Homebuyer’s Report and a Building Survey. The cost of each is reflected in how thorough it is, with the latter being the most comprehensive. The most basic – and cheapest – is called a home condition survey. Paying for a good survey could save you money on repairs further down the line.
‘In 2021, a UK house survey could cost anywhere between £290-£1,390. Costs vary depending on the location and the type of house survey carried out, as well as the value and size of the property,’ says Dave.
Although somewhat costly, they are well worth the spend. ‘Before you commit to any purchase legally, you must eliminate as much risk as possible by obtaining a survey and valuation on the property you intend to buy,’ says Gemma Caulfield, Residential Branch Manager and Senior Valuer at Bramleys. Dave agrees: ‘It gives you the opportunity to back out of the sale if the survey discovers expensive repairs,’ he says. ‘Or gives you the information needed to renegotiate.’
Image credit: Tom Meadows/Future PLC
7. Mortgage fees
Most mortgages come with arrangement fees for setting up the loan. ‘Some lenders will charge these, while others won’t,’ says Paul Wheatcroft, Account Director at My Local Mortgage. ‘Depending on the charges that your lender imposes, you’re likely to pay between a few hundred pounds to one per cent of the mortgage,’ he says.
Some mortgage brokers may charge you a fee for their services. Others make their money off of a commission from the lender instead. How a broker charges will vary because some will charge a one-off fee, while others will bill each time they provide advice. ‘Always be clear on how much you will be charged ahead of seeing a mortgage broker,’ says Pete Mugleston MD & Mortgage Advisor at Online Mortgage Advisor.
8. Legal fees
In addition to solicitor fees and conveyancing costs, which can be anything between £500 and £1,500, there are additional legal costs which you need to consider in the cost of moving house. ‘The Land Registry fee will cost between £20 to £910 based on the purchase price of the property,’ says Vanessa Rhodes, Partner in the Real Estate team at Kingsley Napley.
‘Search fees will set you back between £350 to £800, depending on where the property is located,’ says Vanessa. ‘Local authorities charge differing rates and a specific search for your property may need to be undertaken due to its location,’ she says.
Image credit: Future Plc
9. Electronic transfer fee
An electronic money transfer covers the movement of cash between the mortgage lender, conveyancer, the buyer and seller. ‘We charge £10 plus VAT (£12 total) for same day CHAPS and £3 plus VAT (£3.60 total) for a three-day BACS transfer,’ says Vanessa.
10. Removal costs
When using a removal company, there are many factors that will affect the overall cost, including the distance you are moving, the time of year and the amount of stuff you have. Removal firms charge more at weekends and at the end of the month.
For a rough idea of cost, a survey by Compare My Move found that the average cost of moving house in the UK came in at £1,761 plus additional charges for packing materials, special care items and access issues.
Prices for removal varies from company to company, so ensure that you get a good range of quotes from various firms. As a guide, Thomas Goodman property expert at MyJobQuote suggests using the following as a guide:
One-Bedroom House
● 50 miles – £300-£410
● 150 miles – £400-£520
Two-Bedroom House
● 50 miles – £500-£630
● 150 miles – £620-£740
Three-Bedroom House
● 50 miles – £740-£860
● 150 miles – £850-£980
Four-Bedroom House
● 50 miles – £990-£1100
● 150 miles – £1110-£1250
Five-Bedroom House
● 50 miles – £1280-£1400
● 150 miles – £1390-£1520
The cost for removal will depend on the size and contents of your home and the distance to your new property. Whether you choose to pack yourself, or instruct your removal company to pack your things for you will make a difference too. Most removal firms will work out a fee based on how many hours they expect the move to take. Also, the cost of petrol, how many vans they require and additional crew members will reflect the price.
There are additional costs, too. ‘If you would like the company to dismantle and reassemble furniture, expect to pay more for this,’ says Thomas. Contents insurance for your belongings will also be added.
If you are moving across country or abroad, you can expect the removal costs to be considerably higher than if you were only moving down the road. ‘Long-distance moves incur higher van costs and an international move may require additional shipping container costs,’ says Thomas.
It’s cheaper if you do the packing yourself, so the removal company is only charging for the moving part. Also, save on packing materials by re-using boxes and packaging materials that come with deliveries.
How to save on the cost of moving house
If you’re stretching your budget to the limit to get your dream home, you’ll want to keep any moving costs to a minimum. Luckily there are plenty of ways you can get those bills down.
We’ve got our own golden rules for you to follow, and have also added some cracking advice from the penny-pinching gurus at Promotionalcodes.org.uk.
1. Declutter your home
Removal quotes are based on volume so the more you take with you the more you’ll pay. Be brutal – if you haven’t used something in the past two years, it’s unlikely you’ll do so in the future. You’ll in turn reduce the amount that the removal men have to pack up, meaning they’ll charge less.
2. Book as early as you can
Providers often charge more for late bookings as they know you’ve got less room for manoeuvre. Book moving services in plenty of time, particularly conveyancing as the full process can take between eight and 12 weeks from the time you instruct a property solicitor to completion.
TOP TIP: Avoid Fridays, particularly before a bank holiday, as these are the most expensive days. Other suggestions include moving in off-peak seasons, such as the autumn. Also, choose a mid-week day rather than the weekend, which tend to be more popular among house-buyers.
3. Compare providers
Get three quotes from removal firms for the best price and use one that is a member of the British Association of Removers as they will be insured for your contents and abide with by its strict code of practice.
DIY removals will obviously be cheaper, but far more stressful and there’s still the hire costs and petrol to take into account.
4. Eat all your food beforehand
Bringing food from your old house isn’t just a transportation expense. Moving fresh and frozen groceries comes with the risk that they could spoil, or leak and damage your things, causing you to have to fork out on replacements. So eating everything up beforehand makes much more financial sense!
5. Sort out your packing materials months in advance
You could just head to your nearest self-storage facility and buy all the boxes and bubble wrap you need… but it will cost you. Instead, head to you local supermarket and ask if they have any boxes they can give you for free. As they get deliveries every day, it’s more than likely they’ll have some going spare.
‘Use the materials you already have wisely, too,’ says Darren Williams of Promotionalcodes.org.uk. ‘Bedding, towels and clothing make great padding for fragile items or awkwardly packed boxes that rattle around during transit.’
6. Use freezer bag for nuts and bolts
Disassembling furniture to move it might seem like a good idea… until it gets to the other end and you realise you’ve lost a crucial nut or bolt and can’t put it back together again!
You can therefore save yourself from having to buy new furniture by popping every screw or pin or bolt in a freezer bag. Then tape the bag to the corresponding piece of furniture. When you come to rebuilding everything, you’ll have exactly what you need to hand.
7. Redirect your post
Avoid late-payment charges and prevent your personal details from falling into the wrong hands by having your post redirected.
Prices start from £33.99 per last name, and you can have post redirected for 3,6,9 or 12 months, and as Darren says, ‘being a victim of fraud could cost you a lot more’.
Additional words by Miriam Habtesellasie/Amy Cutmore
The post The cost of moving house – and how you can make savings appeared first on Ideal Home.
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