Planning a big move in 2019?
If so, you’ll need to know about all the costs associated with relocating. To avoid running into any nasty surprises, we’ve asked Matt Stevens, Director of mortgage broker The Mortgage Genie, to break down the process of moving home and how much it will cost you.
Whether you are upgrading to grow your family, relocating to be closer to work, or simply just fancy a change, moving home can be a real hassle. Not only do you have to find a home and have an offer accepted on it, you also need to find a buyer for your current home in a timeframe that is suitable for everyone.
The process of buying a home typically takes months and involves multiple parties acting on behalf of both the buyer and the seller. The costs for mortgage fees, conveyancing, building surveys, and taxes soon add up, with the average cost of a house move in 2018 being £10,210, according to My Big Move. With that in mind, in this article, I’m going to break down these costs to make sure you are prepared for relocating in 2019.
Mortgage fees: To secure your mortgage, you will generally have to pay a booking fee (up to £250), as well as an arrangement fee, which can be as much as £2,000. Shop around to find the best deal and, if possible, make sure to pay these costs up front, rather than adding them to the mortgage. It’ll cost you more now but be cheaper in the long run as you won’t pay interest on them.
Price valuation: To secure your mortgage, the lender will request a valuation survey to check that the property is worth at least the value of the mortgage. This can range from £150 to £1,500, depending on the value and size of the property.
Deposit: The deposit — typically 10–20 per cent of the house price — is the amount you put down to exchange contracts and secure the property. As you are selling your current home, your buyer will give you a deposit on your property, which you will then use to pay the deposit on your new home, with any difference being made up with your own cash.
Stamp duty: In simple terms, stamp duty is a tax that you must pay when buying a home. You pay zero per cent on the first £125,000; two per cent on anything up to £250,000; five per cent on anything up to £925,000; ten per cent up to £15 million; and 12 per cent on anything over £1.5 million. This gets even more complicated if you already have a second home. Get an idea of your situation by using the SDLT calculator.
Building surveyor: Depending on the kind of property you are buying, it is usually wise to have your own survey carried out on the property. This survey will flag up potential problems with the property, saving you money in the long run. A basic survey can be purchased for around £250, but a full structural survey can cost up to £600. Home Owner’s Alliance does a great job of breaking down which survey you might want to go for.
Conveyancing: While you can do the conveyancing yourself, it’s not recommended unless you have a lot of time and a strong grasp of the legal process. Most people hire a solicitor to carry out all the legal work for them, with firms usually offering conveyancing packages ranging from £800–£1500, which have additional searches you may wish to carry out, costing £200–300 pounds.
Estate agent fees: If you decide to use an estate agent to market and sell your property, you will typically negotiate to pay them one to three per cent of your home’s sale price. Alternatively, you can take on the bulk of the work yourself and list your home on one of the many online estate agents — just make sure they’re fully regulated by the FCA.
Insurance: You must take out buildings insurance on your new property from the date that you exchange contracts to protect you from fires, floods, and anything else that might damage it. The price you pay will generally depend on the value of the property, but shop around as many providers offer welcome bonuses.
Moving costs: Hiring a removals company could cost you as much as £600 depending on how much you own, but you can generally do it for much cheaper by hiring a van yourself. You might also need to consider the cost of child and pet care on moving day, as well as the cost of a takeaway for your first night in your new home (trust me, you won’t want to cook).
Repairs and redecoration: If you carried out a building survey, you will be aware of any issues with the property, some of which will need to be dealt with immediately. The average repair bill for homebuyers who don’t get a survey is £5,750, according to Today’s Conveyancer.
As this guide has explained, moving home in 2019 won’t be cheap. But, if you take the time to shop around for the best deals, you could end up saving thousands of pounds.