Guest blog by Alex Murray from Alliance Removals & Storage
Moving home has always been expensive, thanks historically to the costly legalities involved. However, since the credit crunch really bit into the economy, the legal costs of moving are being fast out-priced by other key areas of ‘routine’ house moves.
Estate Agent Fees
Although estate agent fees aren’t payable when you’re buying only, if your move involves selling a property your overall costs increase significantly. With fees generally falling between 1% and 2% for sole-agency instructions and up to 3.5% for multiple agencies, estate agent costs generally add up to around 38% of total moving costs (£3,400 average).
Stamp Duty Land Tax (SDLT)
Stamp Duty is now a major additional cost to a house move. Lloyds TSB report that the average tax of around £2,000 now accounts for 21% of overall costs, from charges to homebuyers of 3% on properties costing more than £250,000 – at least £7,500 extra to find – or 1% for properties of £125,000 to £250,000. Although there’s no stamp duty payable on homes costing less than £125,000, the cost of an average home is now significantly more than this – £169,124 in March of 2014, so clearly the majority of buyers are obliged to pay this additional expense.
Both savers and borrowers pay the price in the current economy, with many home buyers feeling the pinch twice:
- Lenders often demand significant deposits which first time buyers particularly are obliged to save long and hard for, with little help from favourable interest rates.
- Many lenders now add arrangement fees to their mortgage packages. These have increased by a massive 252% since 2001, with hopeful borrowers now facing an average additional fee of £1,076 on top of their moving costs.
It’s not all doom and gloom however for first time buyers; with the aid of the government’s Help to Buy scheme new or existing properties, up to £600,000, can be purchased with just a 5% deposit.
Whilst high-street solicitors once enjoyed a considerable monopoly on convenyancing, legal fees for house buying and selling used to be anything up to 1% of the property’s value. However, the emergence of dedicated conveyancing companies, freelance legal services and even D.I.Y conveyancing packages have meant more competitive legal costs across the industry. This is one area where homebuyers can actually expect to save some money with certain compulsory fees, such as Land Registry costs, falling in recent months. From 17 March 2014 Land Registry have in fact substantially reduced fees for many electronically lodged applications.
Survey costs range considerably:
- “Free” or low cost (around £200) valuation reports are the minimum mortgage requirement.
- Homebuyer’s reports start around £300.
- Full structural surveys can cost from £500 and run into thousands, depending on the size and age of the property.
With average prices of around £500 for moving the contents of a small flat to £2,000 or more for a five bedroomed home, removal costs aren’t one of the most expensive elements of moving home. However, getting a rough estimate rather than a comprehensive quote or failing to check issues such as insurance can be costly mistakes, so thorough checks and planning are needed. Make sure you use a checklist for moving house to ensure nothing gets forgotten; causing headaches on the day of the move.