Moving home is an exciting time but also a challenge for many Britons, especially for first-time home owners. Apart from the many organisational aspects that need careful consideration, the costs that accompany moving home in the UK are diverse and often complicated. In this guide, we detail the common expenses involved in the process and help you plan for your move.
As a general rule, do keep in mind that many of the cost estimates below will vary depending on your location in the country, the size of your property, and the extent of your household. The prices below are national averages that are helpful in making educated estimates about your particular circumstances.
Stamp Duty
Stamp duty is also commonly referred to as ‘stamp duty land tax’ or ‘SDLT’. Stamp duty is payable within 30 days of contract completion, so you need to have the amount on hand by the time of completion (although mortgage lenders will usually check to see you have the money available during the mortgage application stage). The amount is calculated according to five tiers, depending on the price of your new home. The first £125,000 are not taxed; the amount between £125,000 and £250,000 is taxed at 2 per cent; the amount from £250,000 to £925,000 – at 5 per cent; the amount from £925,000 to £1,500,000- at 10 per cent; and any amount higher than 1,500,000 – at 12 per cent.
In practical terms, this means that if you buy a home for £300,000, you will pay zero per cent stamp duty on the first £125,000; 2 per cent on the following £125,000, or £2,500; and 5 per cent on the remaining £50,000, or another £2,500. Therefore, your total stamp duty is £2,500 + £2,500 = £5,000 GBP for a home valued at £300,000.
Crucially, first-time home buyers benefit from much more favourable rates of stamp duty, with nothing being payable up to £300,000.
Removals
Remove charges vary greatly depend on where you live, where you’re moving to, and the volume of good that you want to be removed. A good rule of thumb regarding distance pricing is to estimate £1 per mile. A typical three-bedroom home translates into around 850 – 900 cubic metres of movable property. This volume roughly corresponds to £1,100 – £1,250. Add to that the mileage costs and you have a reliable general estimate on the price of your move.
There are various measures you can take to drive your removal fees down. You can disassemble and reassemble bulky furniture yourself, which should shave £100 to £125 off the total cost. Packing your belongings yourself can save you up to £250, but keep in mind you would have to invest in buying your own packaging materials to ensure your things are protected. This leaves you paying only for the loading and unloading (£750 – £800 for our three-bedroom example) and the travel distance. It is up to you to judge whether the financial savings justify the time and effort you would need to invest in actively participating in your own move.
Surveys
Property surveys are an essential part of most property purchases. The prices vary depending on the type of survey you request, and your choice depends in part on the kind of property you plan to acquire and on the extent, to which you trust the seller. There are four basic types of property surveys that are officially approved by the Royal Institute of Chartered Surveyors:
A basic Condition Report costs £250, covers the most general state of the property and includes a valuation as well. Its traffic-light format provides merely a glance over the basics. The HomeBuyer Report, on the other hand, goes further into depth on the building’s properties and core characteristics. It will set you back around £500. Keep in mind it does not include a valuation and does not require your surveyor to move bulky furniture or inspect below the floorboards. If you want such a closer look, you should choose a Home Condition Survey (usually £500 and up) that includes a ranked list of issues and concerns about your prospective property as well as advice on how you could go about fixing them. A Building Survey for £700 for more goes a step further and covers inspections behind furniture and under floorboards in search of potential hidden defects. It includes professional advice on how to deal with the discovered problems as well as a property valuation.
Legal Fees
Conveyancing costs are another unavoidable part of moving home. It is the job of your solicitor to verify all documents required for the transaction are available and in good order. Conveyancing fees vary slightly between freehold and leasehold properties since leasing involves more paperwork and more professional expertise. As with stamp duty, the conveyancing costs depend on the property value. Freehold conveyancing usually costs start at around £400 and can reach a little over £1,400 for more luxurious properties, while leasehold properties will set you back between £750 and £1,550.
On top of conveyancing, your solicitor will charge you for search fees and land registry fees, with costs varying depending on where you live, as well as the size and value of your property. Thus, the total solicitor’s fees for the purchase of an average home in the UK add up to about £950.
Estate Agent Costs
Estate agents are in charge of marketing properties for sale, and their fees usually come down to 1.2% and 2.16% of the final price of the property. For your money, the estate agent will schedule and guide viewings in order to find a suitable buyer for your old property. As with many other trade sectors, the Internet has allowed for estate agent costs to drop, and you can find quotes as low as £300 online. Be sure to read the small print on such attractive offers, however; many online estate agents stipulate that you conduct viewings yourself and might cut other corners as well.
