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.
23 quickfire tips & ways to save on moving costs
For many movers, the house move itself is left until the last minute. You’ve been busy dealing with lots of other costs, reports, surveys etc, in relation to your move, and suddenly it all seems real and the moving day is fast approaching. In order to make it as smooth as possible, whilst saving you some money in the process, we provide some top tips below:
- Calculate the costs
To know whether you’re getting a good deal, and to be able to get the right help, work out how much you have to move, how far you need to travel, and how long the move is likely to take. Average removal costs in London are estimated at between £300 and £600, and there are numerous factors that will impact this.
- Compare, compare, compare
Get five quotes for removal companies. It may seem a lot but you will often find people charge a wide variety of amounts, so you can make an informed choice based on what you are quoted.
- Ask for referrals
If someone you know used a company that did a really good job, you’re unlikely to have any problems and end up spending more to rectify such errors.
- Plan ahead
Make sure to put money aside for additional expenses such as boxes, bubble wrap, marker pens, tape etc!
- Collect bags and boxes
Ask around – your friends may have spare bags lying around the house (Ikea bags for example). Any bags or boxes will come in useful so collect these ahead of your move. You can also ask at local shops if they have any spares.
- Disassemble your furniture
This will save you money as you’ll avoid the removal companies having to help you with this, and charging you for the extra help.
- Don’t waste food
Start to run down your freezer and fridge before you move so you can start afresh in your new house.
See this as the perfect excuse for a sort-out, and to get rid of unwanted items. The less you have to move, the less expensive your move will be.
- Sell unwanted items online
Once you’ve de-cluttered, you can make back some quick, easy money by selling your items online on a ‘must go’ basis.
- Buy second hand
If there are things that will help out with your move but you can’t justify buying new items, look for second hand.
- Get things for free
Or even better, you can often find hidden gems completely free on buy and sell websites such as freecycle and gumtree.
- Book off-peak season to move
If you’re flexible about your move, try and work it around the off-peak season for lower removal rates. On that note, also avoid bank holidays for lower costs.
- Book the cheapest day to move
Rates are generally higher at the end of the week, or the end of the month, so it’s advisable to avoid these times.
- Move during business hours
Again, rates will be higher outside of business hours, so if you work full-time, it might be an idea to use remaining holiday entitlement and move mid-week to allow for a cheaper cost of removals.
- Get help from friends
A few extra pairs of hands will go a long way when it comes to labelling, boxing up and wrapping your belongings before the move.
- Look into hiring a van
If you have been renting up to this point, or living with parents, you might find it could actually work out cheaper to rent out a van for a few hours, rather than hiring a removal company.
- Ask friends and family to help you move things in their cars
Alternatively, you might even be able to fit everything into a few carloads, if you don’t have much to move and have willing friends and family, this would save you lots.
- Get airtight bags for clothing
Save a huge amount of space by shrink-wrapping your clothes before packing them up.
- Look into parking
Research the area. Do you need to pay for parking or do you need a visitor’s permit? To avoid fines or any shock upfront charges, work out the best place to park where there is ample space to unload.
- Temporary accommodation
If you need temporary accommodation, reach out to family and friends before booking into a hotel. It may not be feasible but this would save a lot if you’re fortunate enough to have someone willing and able to help.
- Storage costs
Shop around to compare prices and security arrangements, and get a sense of average costs. Estimate the length of time you’ll need storage, because prices will depend on this.
- Extra moving-day costs
Do you need to budget for extra childcare or kennels for a pet? Will you have the time or facilities to cook or should you plan for takeaways for a day or two? These costs can all add up so make sure you include them in your budget.
- Update your new address
The Royal Mail Redirection service is a reliable and cost-effective way to continue to receive mail when you move home.
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.