Whether you’re moving up the property ladder or downsizing, there is a lot to think about when moving house. A big component of the moving process is the financial cost involved – it is not cheap – as I’m discovering while in the throes of moving myself.
What is the cost of moving house?
If you are thinking of buying or selling a property and moving home soon, there are some significant upfront fees to think about, as well as your ongoing mortgage costs. These include inter alia solicitor’s fees for the purchase, insurance for the property and removal costs. We have put together a list for you to consider when working out your overall budget:
These may include a booking fee of £99-£250, an arrangement fee of up to £2,000 and a mortgage valuation fee (typically £150 or possibly more).
Types of Mortgage
There are hundreds of types of mortgage products and several types of mortgage for different circumstances. Look beyond the interest rate. Make sure you also take the fees and charges into account when choosing a mortgage.
The word deposit has two meanings in the purchase and sale of a property, commonly it is the amount you yourselves put towards the cost of the property when you buy your home.
Banks and other mortgage providers like to see 5% to 20% of the purchase price put up as a cushion against falling property prices.
Generally speaking, the bigger the deposit you can pay, the more likely you are to be given a mortgage (subject to a mortgage affordability assessment), and the lower your interest rate is likely to be.
When you exchange contracts with the other party, as a purchaser you are required to place this ‘deposit’ with the solicitors as a bond that you will perform under the contract. This deposit is part of the purchase price on completion but it would be lost (paid as compensation to the vendor) if the sale fell through. Historically this deposit used to be 10% of the purchase price but is more commonly now 5%, however be aware that this has to be paid to your solicitor on exchange so you need to have cash handy at this point!
Stamp duty is a government tax paid on the change of ownership of homes costing £125,000 or more. Stamp duty is likely to be the biggest expense that you will pay other than your deposit. The amount of Stamp Duty rises incrementally depending on the purchase price of the property and only applies to the excess purchase price over £125,000.
A 2% Stamp Duty is charged on the portion of the purchase price of the property between £125,001 and £250,000 and 5% is charged on the price between £250,001 and £925,000. For more expensive properties there is a 10% Stamp Duty on the value between £925,000 and up to £1.5m and 12% for any part of the purchase price above £1.5m. For example, a house costing £750,000 would incur duty of £27,500.
It is strongly advised that before you buy a property you get a surveyor to do checks. This is vital, so that you understand if there are any problems before you buy. Surveys range from a basic home condition survey to a full structural survey.
Paying for a thorough survey could save you money on repairs in the long run. There are three types of survey: the Valuation usually carried out for the Lender (basic valuation); the Homebuyer’s Report which costs between £250 and £500; and the more comprehensive Building Survey (Structural Survey) which can cost anything up to £1,000 plus VAT, depending on the value of the house. You should also consider having newly built properties surveyed, although the condition of new properties is guaranteed by the builder, it is much safer to get any significant snagging carried out before you move in.
You will need to get a solicitor to deal with the legal aspects of buying a property. There is no standard fee so it is a good idea to shop around. Some solicitors charge a flat rate, some an hourly rate, while others charge a percentage of the property price, normally up to half a percent. As well as the price of your house, the fee will take into account factors such as the amount of paperwork involved, how much skill is required and how complicated the transaction is.
MAKE SURE YOU CHOSE A GOOD SOLICITOR. Many a sale has fallen through due to a poor quality solicitor taking an overly long time to get the job done. When your dream house is at stake, it is really not worth skimping here.
You will also have to pay for the legal work done by your lender’s solicitor. Again, prices vary so ask your lender how much they charge. If you use the same solicitor as the lender to do your conveyancing this may save you money, but do not forget to compare charges with other firms.
Local Authority Search Fees
Local searches will be carried out by your solicitor/conveyancer to ensure that there are no potential problems such as planning permission on neighbouring properties or plans for new roads nearby. Allow at least £60, or more in London boroughs.
Estate Agent’s Fee
This is only paid by the seller, not the buyer, for the estate agent’s services. It is negotiated when they put the property on the market. It is usually 1% to 3% of the sale price plus 20% VAT.
A frequently asked question “how much does a removal company cost?” It is well worth getting several quotes beforehand, which we can do on your behalf, saving you the time and hassle. Different companies will offer different quotes relative to the number of components necessary to your move, such as;
- Volume – overall volume of your belongings to be moved, usually in cubic feet. This is important as it determines a) the size of vehicle required for your move b) how long it will take a crew to pack/ wrap and load your belongings and c) the packing materials required for your move.
- Access – the access at both your originating and destination properties (for example how close a Removal Companies lorry can park to your front door, whether there is any low bridges or tight lanes to get to either of the properties. This is important as it determines what size vehicle can be used and if any shuttle vehicle might be required to transport loads if access is tight.
- Distance – between your origin and destination property, this is important as it determines the costs for transport. If the distances are considerable overnight charges may be involved
- Services – the service elements you select i.e. full or part packing, handyman services, dismantling of items. Special Care Items – any special care items that might require a little extra protection for example crating for a precious grandfather clock or extra wrapping for highly sentimental items or a grand piano. Special Handling Items – any items requiring special handling for example items that might need to be removed via a window, overweight items requiring crane’s or special lifting equipment etc.
- Timing – don’t forget that nothing happens until funds are transferred and the property becomes yours. Unfortunately banks are not perfect and delays at the last minute are not unknown.
Relocating can be a stressful business, so we have a number of services on offer that aim to lighten the load.
We can organise everyone and everything, managing the whole process for you from start to finish guaranteeing a move that is hassle and stress-free. We can act as the main point of contact for all contractors involved, coordinating removal firms, cleaners, estate agents and legal teams.