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How Much Does it Cost to Move House?

moving house

in Mortgages, Property, Saving Money

Not withstanding the extortionate cost of buying a new home in the UK, how much is the actual process of moving house going to cost?

Assuming the property market remains relatively steady, or perhaps even improves, you can usually consider the cost of a new home an investment rather than a cost but what of the other, unavoidable costs associated with the moving process which you’re not going to recoup?

Solicitors

Conveyancing solicitors are an unavoidable part of the home buying process and as with any professional service which everybody needs, they’re services come at a premium. Hourly rates for conveyancers are usually in the range of £100-150/ hour and the average legal fees for a straightforward purchase of a £250,000 house are between £600-800. These fees can quickly escalate if the purchase becomes more complicated and if your purchase falls through you’ll almost certainly be charged for part of the fees for the time your solicitor has spent on the project.

Searches

Local authority searches, organised by your solicitor are going to add £200-300 to your legal bill in most areas.

Survey fees

Add at least an extra £200 for a survey of an average house, another unavoidable (if somewhat reassuring) part of the mortgage application process. As with other fees the cost of the survey is non- refundable if the purchase falls through.

Arrangement fee

Most mortgage providers will charge an arrangement fee for the privilege of applying for a loan with them! These usually range between £750-1250 although you can find some providers who don’t levy a fee (check out mortgage best buy tables to see who are offering fee free mortgages). Whether these fees are refundable if you don’t end up completing varies from provider to provider and is worth checking if you think there’s any chance you won’t end up taking the loan.

Stamp duty

Stamp duty is going to add a whopping 1-7% on the cost of your new home and is payable immediately on completion. Unlike normal (and sensible) tax systems stamp duty brackets increment the % you pay on a fixed basis so if you go over the £250k bracket by a penny you pay the higher rate of 3% on the whole purchase price rather than just on the penny you went over the threshold. This creates a ridiculous situation where anyone with a house worth £255k has to sell their home for £5k less than what it’s worth because no buyer wants to subject themselves to the extra £5k of tax it costs to go over the stamp duty threshold! C’est la vie, the lesson here is just to be aware of your stamp duty thresholds and take these into account as part of your cost of moving.

Cost of sale

Unless you’re in the privileged position of being a ‘first time buyer’ it’s likely you’ll be selling your house at the same time as buying, subjecting you to additional legal fees and estate agent fees, usually costing you 1-1.5% of the sale price.

Removals and storage

Don’t forget to account for the cost of physically moving your stuff from your old house to new and possibly storing it in the interim period. Domestic removals within the UK are likely to cost you … If you use a removal firm. If you’re moving locally you might be able to shave a bit off this by hiring a van or drafting in your understanding friends with large boots on their cars but one way or another you’re likely to be paying out again here, be it in cash or the return of favours!

Moving in

It’s easy to forget that the house you’ve looked around is going to look pretty bare once the old owners have moved out taking everything (perhaps including the kitchen sink) with them. If you’re a first time buyer and don’t have a lot of furnishings and appliances it might be worth trying to get the vendor to include these within the cost of the sale if you’re going to struggle to pay for them once you’ve moved in but be aware that any money you add to the sale price is going to be money you’re paying interest on for the life of your mortgage so If you can avoid it it’s definitely better to avoid paying for that microwave for the next 40 years!  There’s no rule of thumb for how much furnishings and decorating your home will cost as this varies massively based in your taste but it’s quite likely to be in the thousands rather than hundreds.

The mortgage

Read this far and though, ‘actually that’s not too bad, I can afford that’, well you might want to stop reading here! What many people forget is that the mortgage they’ve taken to buy thee home is going to cost them a huge sum of money in interest. At today’s interest rates (base rate floating around the 4% mark) a £200k mortgage is going to cost you over £130,000 in interest over a 30 year repayment term. If house prices continue to rise with or above inflation over that period this shouldn’t really be noticeable. You’d hope your house will be worth considerably more by the time you’ve finished paying for it but there’s no guarantee that will be the case so don’t forget to factor in the cost of financing your new home when trying to work out the real cost of your move.

Of course none of this should put you off taking the plunge and buying your first (or second, or tenth) house. Just make sure you’re taking this costs into account when working out what you can afford. And if you’re thinking you can make a quick buck buying a property, fitting a new kitchen, hanging some nice wallpaper and selling it on at a profit remember to take into account the actual cost of moving in any projection of how much money you can make.

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