You’ve drawn up a budget for your upcoming move. You’ve estimated what your property is likely to sell for, fixed the price range for your next property, saved a deposit of roughly 10% of your estimated purchasing price, and you’re confident that there will be enough left in the kitty to cover the cost of removal and moving day logistics. You’re all set.
Or perhaps you’re planning to rent and after some diligent saving, you’re ready to hand over a deposit. You’ll rent a van and round up some friends to help you move. No problem.
If either of these scenarios sound like you have everything down pat, you’re actually not totally prepared and you may in fact have a problem.
The true cost of moving house is far higher and more complex than you may expect. Particularly if you are buying, and even more so if you are both selling an old property and buying a new one, it involves a good deal of paperwork, as well as professional estate agency services.
Here is a guide to what you should take into account when calculating the cost of moving house:
Before the move: fees & a deposit
Although 10% is the average deposit paid when buying a new home, it can range from 5% to 20% of the purchasing price and there are good reasons for paying the biggest deposit you can afford – it reduces the amount you have to borrow, makes it more likely that your mortgage will be approved, and puts you in line for lower interest rates.
If you are selling you will ideally need a property valuation to establish the market value of your existing home (something a reputable estate agent can provide), and if you’re buying, your mortgage provider will require a property valuation to decide how much they’re willing to lend you.
Buyers will also have to pay a surveyor’s fee (ranging from £250 for a basic check to around £600 for a full structural survey) to ensure the structure and condition are sound. The good news is this can protect you from paying for costly repairs in the long run.
Set aside some money for stamp duty, which is a government tax on homes worth over £125 000 and ranges from 2% of the purchase price to 12% for homes worth more than £1.5 million. First time buyers don’t pay stamp duty on the first £300 000 for homes worth up to £500 000, but those purchasing an additional residential property (for example when you buy to let) can expect to pay an extra 3% in stamp duty. See the image below for more information:
Whether you’re buying or selling, you will need a solicitor or licensed conveyancer to provide a range of services, from signing land transfer documents to dealing with the mortgage discharge and taking care of settlement. The approximate costs of £850 to £1500 for these services will be well spent.
Your mortgage also attracts a number of fees, for things like booking, arranging, and if you’re remortgaging, for transferring your mortgage to your new home. Pencil in an amount of around £2500 and don’t be tempted to add it to the mortgage where it will accrue interest.
Last but not least, for sellers there’s the cost of appointing an estate agent who will help you navigate each of the steps in this complex process. The payment is negotiated when the property is put on the market, and usually ranges between 1% and 3.5% of the selling price.
The hidden costs of renting
Renting involves less paperwork, but saving for a deposit is not enough. You should also set aside funds for a holding deposit to reserve the property (benchmarked at the equivalent of one week’s rent), which will however be deducted from your main deposit. Be prepared to pay a contract or administration fee of around £350, and up to £100 each for reference and credit checks.
Renewing your tenancy, amending a rental contract, and the property inspection after you move out will also attract fees, plus there are penalties for missed rental payments. It’s important to remember that any damage that occurs during your tenancy will be deducted from your returned deposit.
Moving day is here!
Although the average removal costs in London are estimated at between £300 and £600, numerous factors impact how much moving day will set you back. It is imperative that you get quotes for removal companies so that you can determine which will be the most cost-effective.
The bigger the move, the more expensive it is, but distance and even the day of the month and the time of the day can impact the price. If your move is going to take extra time because the movers have to disassemble and reassemble unwieldy pieces of furniture, that can cost you a tidy sum too.
Rates are generally higher when you move at the end of the week, at the end of the month, or on a bank holiday. And if your move takes outside of business hours, you can expect to pay a much more.
Extra costs can include packing (if you are not doing so yourself), packaging materials such as boxes and bubble wrap, cleaning and insurance.
With so many variables, it is impossible to provide anything but the broadest ballpark figures, but as a rule of thumb you can expect to pay around £250 for a local move of a one-bedroom apartment (between £350 and £500 if you’re moving long distance up to 124 miles), roughly twice that for a three-bedroomed apartment; if you’re moving a five-bedroomed home the ballpark is £850 to £1200 for a local move and up to £2000 if you’re moving much further away – no extras included.
Finally, it is advisable to set aside some money to spruce up your new home. The average repair bill for new home-owners is estimated at close to £6000, and that’s before you’ve painted the walls and reupholstered the couch.
Time to get out the calculator, and double-check whether your moving budget has what it takes. Tick the boxes when you go down the list, and remember that the expert team of estate agents at the Strawberry Star Group are ready to answer your questions, offer specialist advice, and walk you through every step as you prepare to move into your new home.