Moving to a new home can be exciting, but it can also be stressful and expensive. Notwithstanding a mortgage and deposit, the estimated average cost of moving in the UK is around £8,885, although this may vary dramatically depending on where you live1. Stamp duty, estate agent fees and property survey costs can quickly escalate, and that’s before you factor in removal expenses on the day.
Even savvy homebuyers can be caught out by unexpected costs, so it pays to be prepared. Here, we break down the true cost of moving to help you budget like a pro, and avoid any surprises along the way.
Costs on the day
1. Stamp duty
Stamp Duty Land Tax (SDLT), known simply as ‘stamp duty’, is probably one of the biggest costs new homeowners face. In England and Northern Ireland, you’re liable to pay stamp duty on any residential property or land costing more than £125,000, which applies to leasehold and freehold properties.
Under current legislation, stamp duty is charged at 2% on the portion from £125,001 to £250,000, 5% on the portion between £250,001 to £925,000 and 10% on the portion from £925,001 to £1.5m. The highest band, at 12%, is charged on any remaining amount above £1.5m2.
In November 2017, the government changed the stamp duty rules for first-time buyers, scrapping it on properties up to £300,000.
Health and fitness blogger Vanessa Woodgate bought her first home in Streatham, London. “Even though I knew a bit about stamp duty, I was still shocked at the amount I was liable to pay on a one-bedroom, new-build flat. Luckily, the purchase was delayed until December, so I was able to benefit from the new rules, saving me a few thousand pounds in the process.”
Different rules apply in Scotland and Wales, however. In Scotland, homeowners are subject to the Land & Buildings Transaction Tax which applies to properties over £145,0003. In Wales, Land Transaction Tax is payable on properties over £180,0004.
If you’re saving up for stamp duty – as well as additional moving costs – consider setting up a savings goal. You can set savings goals online by using the Track Savings Goals function in Money Tools, our interactive financial planning service in Online Banking, and through Barclays Mobile Banking5.
2. Estate agent fees (if you’re selling)
If you’re selling a property, the chances are you’ll need an estate agent to market it for you. High-street estate agents charge anything between 0.75% and 3.75% of the selling price, but don’t be afraid to negotiate. Check if the price you agree includes VAT, as this could add an additional 20% to the final bill.
Online estate agents may provide a cheaper alternative as they usually work on a fixed-price basis (with prices starting from around £300). Read our article on the pros and cons of using an online agent for more information. [link TBC]
3. Valuations and surveys
It’s important not to confuse your mortgage valuation with a survey. Your mortgage lender will insist on a valuation once you’ve found a property, to confirm its value. Lenders will most likely choose a company they trust and some expect you to foot the bill. Other lenders, including Barclays, don’t charge for the vast majority of valuations, and will usually opt for a desktop valuation using the Halifax Price Index, which has the advantage of not requiring anyone to be present at the property. “In most circumstances, we don’t charge customers to get a valuation for a property,” says Barclays Head of Mortgages, Hannah Bernard. “We only charge a fee where the property is worth more than £2 million or is a buy-to-let purchase.” One thing to note is that, if the lender is carrying out a valuation to support the mortgage assessment, you may not be entitled to receive a copy of the valuation report.
A survey, meanwhile, is not compulsory though it is advisable, says Compare My Move co-director and co-founder Dave Sayce. “You shouldn’t underestimate the importance of getting a property survey done before purchasing a house. Its main purpose is to highlight hidden issues that could crop up later, which will save you money in the long run.”
If you do decide on a survey, it must be carried out by a qualified surveyor – the Royal Institute of Chartered Surveyors (RICS) is a good place to start. There are different levels of surveys, ranging from a basic Condition Report, which costs around £250-£300, right through to a comprehensive Building Survey, which could cost anywhere between £500-£2,000, depending on the size of the property. As a general rule, the older or more unusual the property, the more comprehensive the survey should be. The HomeOwners Alliance website has some useful tips6.
4. Legal fees
You’ll need a solicitor or a licensed conveyancer to handle all the legal aspects of your home sale or purchase. Licensed conveyancers are usually cheaper than solicitors and specialise in property transfers, although they’re not qualified to deal with complex legal issues. Ask family or friends for recommendations or, alternatively, your mortgage lender for a list of its preferred solicitors or conveyancers.
You could pay around £1,500 for a straightforward transaction, although check if this fee includes the search fee (around £250) and Land Registry Fees, which range from £40 for properties under £80,000 and up to £910 for properties worth more than £1m. To find out more about Barclays mortgage tariffs, call us on 0800 022 40227 to speak to a mortgage adviser, or read more here.
5. Mortgage brokers
A mortgage broker can give you advice, help you find the best deal and guide you through the process to completing your purchase or remortgage, but you may be required to pay a fee upfront or at the completion of the transaction.
All brokers take commission from your mortgage provider: some will deduct this from their fee; others will charge a fee on top; some do not charge any direct fees. Fees can routinely range from £299 to £750 though, if the loan is very large or complex, some brokers may charge a percentage. Most brokers will offer an initial discussion, without a charge.
It’s important to check that the broker you use is independent (‘whole of market’ in their terminology) and not tied to a particular lender. At the start of any discussion, all mortgage brokers should tell you the range of lenders they use, if they charge fees and when they will be collected, as well as the level of commission they are receiving from the lender. This information is collated in the Key Facts Illustration (KFI) or European Standardised Information Sheet (ESIS). Check you’re happy with the details before committing to anything.
Once you exchange contracts you are legally responsible for your new property, not on the day of completion. If your new home is a freehold property, don’t forget you’ll need to take out buildings insurance, so be prepared for any overlap before you move. If your property is a leasehold flat, on the other hand, the building is typically insured by the landlord who owns the freehold, but be sure to check in advance.
Whatever type of property you own, make sure your possessions are adequately covered in time for move day. It’s also a good idea to check out your life insurance to make sure your mortgage is covered, whatever happens.
Costs on the day
1. Removal company
The removals industry is unregulated, but there are steps you can take to ensure your treasured possessions will be looked after during the big move. Kieran Coughlan, Sales Manager at Simply Removals advises consumers to do their homework. “Pick a company with a good reputation within the industry, which generally comes by being affiliated with The Removal Ombudsman. Don’t be afraid to check if they have insurance. Your possessions could be at risk otherwise.”
Alternatively, you may save money by hiring a ‘man with a van’ but, in either case, be sure to get a quote and agree a price up front. You can expect to pay anywhere between £200 - £1,600. Bear in mind that moving during the week could be cheaper than on Friday or at the weekend. The cost will usually be determined by the volume of belongings that need moving, the level of access to both properties and the distance between them. You’ll also need to arrange parking or permits for the van.
If your possessions need storing between moves, it’s usually best to find a facility that’s close to your final destination. The cost of storage will depend on the size of the unit and length of time you require it.
The contents of a one-bedroom flat would usually require a unit of about 50 sq. ft, while the contents of a large three-bedroom house would require a 150 sq. ft unit. Prices will vary, so shop around for quotes, but be prepared to pay upwards of £140 per month. Comparison website comparethestorage.com is a useful starting point.
3. Mail redirection
However organised you are with changing your address, items of post will inevitably slip through the net. Royal Mail offers a redirection service for 3, 6 or 12 months to ensure any mail sent to your old address will be forwarded to your new home.
Prices range from £33.99 for 3 months to £66.99 for 12 months, and redirection can be set up quickly and easily online. It’s currently based on surname so, if you live with someone with a different name, they will need to pay for an additional redirection.
4. Move out clean
If you’re leaving a property that you’ve sold or rented, you’ll probably need to arrange a ‘deep clean’ once you’ve moved your belongings out. Bear in mind that most rental properties will have an end-of-tenancy clean factored into the contract. Your letting agent will most likely provide a list of their preferred cleaning partners, which you may be obliged to use. If you do find your own company, ask for a receipt as you may need to provide this as proof the job was completed. Prices will vary depending on the number of rooms, but expect to pay between £200 and £300 for a three-bedroom property.
Sellers are under no legal obligation to clean a property before handing it over. If you have concerns about the cleanliness of the property you’re buying, you may want to factor a moving-in clean into your budget, too.
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