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Winkworth Guide: The true cost of moving home

We can all agree that buying a house is a huge financial commitment, so it’s important to have an understanding of the costs involved in order to make the process as smooth as possible. Although your mortgage is by far the biggest financial outlay you make, it is by no means the only one.

The average cost of moving in 2019, incorporating the average price of property and necessary fees, is around £9,000. You will need to know how much you should be putting aside for all of the other costs associated with buying a house, which will vary depending on the size and value of the property, as well as the area you are moving to. The following guide will help you understand the true cost of moving.

You will begin by spending money on your booking fee, which is charged upfront by the lender and pays for 'booking' the loan while your application goes through. A booking fee is usually around £99 but can be slightly higher, while some lenders don't charge it at all.

Arrangement fees, sometimes called completion fees, come second and this is an administration charge made by lenders for arranging credit for your mortgage. Arrangement fees vary significantly, however, the average is about £1,000. You can decide to pay the arrangement fee upfront or add it to your mortgage payments, but it will ultimately cost more to do the latter as you will pay interest on it. You may want to opt for a broker such as Trinity Financial to sort out the mortgage as they will scour the market to find you the best deals, and can offer impartial advice along the way. The fees for mortgage brokers vary but will typically be in the region of £500-£600 as well as a small procuration fee, typically under 1%, for the entire mortgage amount.
Lenders require a valuation survey to ensure the property has been valued correctly. Again, the fee varies significantly and can be anywhere from £150 to £1,500. Usually 10% of the fee is used to pay for a homebuyers’ report which involves an inspection of the condition of the property you are going to buy, and sometimes includes a further independent valuation.

If the property is old and/or there are plans for renovation, a building survey will be required. They usually cost between £500 and £1200, and provide an in-depth analysis of the condition of the of the property, including the structure.

Depending on how complex the transaction is, you will normally need a solicitor or licensed conveyancer to carry out all the legal work when buying and selling your home. Legal fees are typically between £850 - £1,500. Registration is necessary to ensure the person who owns the property is correctly noted, and it provides the owner with a land title, guaranteed by the government. It also notes the boundaries of the land, and usually the solicitor will complete the registration process.

Other costs include stamp duty land tax (SDLT), a tiered payment you have to make on any property over £125,000. The tax is payable on the portion of the property that falls within each band rate. Take a look at the current thresholds which should make SDLT a little easier to understand:
 

Purchase Price SDLT Rate
£0 - £125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1,500,000 10%
£1,500,000 and above 12%


For example, if a property is worth £450,000 you will not pay any tax on the first £125,000, 2% tax on the value between £125,001 and £250,000 and 5% tax on the remaining value over £250,001. In total, the SDLT payable on a £450,000 property will be £12,500. First-time-buyers are entitled to relief and will pay no Stamp Duty on the first £300,000 for residential properties worth up to £500,000. So for example on a £450,000 property, first-time-buyers should expect to pay £7,500. For properties priced over £500,000, no relief is available and the first-time buyer would pay Stamp Duty on the full purchase price.

The next thing to think about is the cost of moving your possessions, and this will vary depending on how much you own. If you can move everything yourself, either with your own vehicle or by hiring a van, it will certainly be cheaper, however this can be time consuming and physically taxing. You may likely be better off paying a removal firm. According to numerous cost-of-moving calculators, you will pay at least £400 to move items for a small property, ranging up to over £1,000 if you have got four or more bedrooms.

Although it’s not a legal requirement to have building insurance, your mortgage lender will usually insist that your property is covered at the time of exchange, and this will typically cost an average £100 per year. Additionally, it is a good idea to get home contents insurance too - which costs around £53 per year, to protect your valuable possessions from damage caused by events outside your control. This cover includes furniture, clothing, electrical items, money and jewellery.

Furthermore, an energy performance certificate (EPC) is now a requirement if you are selling, renting or building a property in the UK, and costs between £60 and £120. Since there are no fixed fees, EPC costs tend to vary, depending on a number of factors regarding your property, such as the type of property you own and how many bedrooms it has.

Buying a house can be hugely exciting but also stressful, so understanding and being prepared for the costs involved aside from the mortgage can make the whole process more joyful. We all know the importance of saving for a deposit, but we also need to place the same significance on the smaller costs involved as it will save you from unnecessary stress.

Are you looking to buy, sell, rent or let? Get in touch.

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