The average cost of moving home in the UK has risen by 6% in last 12 months, according to new figures from Property Wire. This is largely down to the ‘hidden cost’ of moving—expenditure embedded in the purchasing process aside from the value of the house itself. Thankfully, there are often ways to keep these hidden costs to a minimum, if you can spot them first. Here are some of the hidden costs of moving home and how you can reduce them.
Negotiate the estate agent’s fee
An estate agent’s help can be essential in finding and selling a property, but it can prove costly when it’s time to pay the bill. Research from Which? found that the average estate agent contract fee is 1.3% of the house value including VAT. While this may sound small, all these smaller hidden costs add up to make a big impact. The HomeOwners Alliance recommends negotiating for a lower fee, as “most agents are prepared to be flexible.” Every decimal percentage point you manage to knock off your contract will help bring down the hidden costs of moving house.
Plan ahead for removals
Less a hidden cost, more a cost you don’t think about until the moving process has entered full swing, removal prices are nonetheless important to factor into your moving calculations. The AnyVan guide to negotiating the cost of moving home suggests getting a removal quote at the beginning of the entire moving process to make sure you set the right amount of money aside for the move.
Calculate your stamp duty
Stamp duty is a land tax paid to the government with every property purchase. It’s currently calculated as:
- 0% on any value under £125,000
- 2% on £125,001-£250,000
- 5% on £250,001-£925,000
- 10% on £925,001-£1,500,000
- 12% on any value above £1,500,001
Using these figures, a transaction of the average house price at the moment (£481,345) would be subject to £14,067.25 of stamp duty. That’s a substantial figure for any buyer. If you’re planning to keep your old property, potentially to rent out, you will be charged even more stamp duty. (3%, 5%, 8%, 13%, 15% to your first property’s 0%, 2%, 5%, 10% and 12%.)
There is no way to avoid paying stamp duty on your first property, but you can avoid being charged the higher rate if you sell your current home before you buy your next one. Just as with the removal cost, it’s best to plan ahead for stamp duty. Money Saving Expert’s stamp duty calculator can help you with this.
Consider conveyancing costs
You’re only moving into one house, but it takes a village. As well as your estate agent, you will need to enlist the services of various legal professionals to complete your move. Conveyancing can cost between £330 and £1,050, according to Really Moving, and the prices vary widely between freehold and leasehold properties. When possible, buy a freehold property to save up to £300 on your conveyancing bill.
Negotiate solicitors fees
There are other legal fees to consider. Registering your property with the Land Registry can cost up to almost £1,000 depending on property price, and ‘searches’ (for planning permission and other hidden details about a property) also come with costs.
Before you buy a property, you’ll have to get it checked by a surveyor, which again will come at a price. As with the agency fee, negotiating can make all the difference here.
Remember regional differences
As we’ve seen, there are ways to make small changes to the hidden costs of moving, but you can make the biggest difference by thinking carefully about where you move. Property Wire’s study found the average cost of moving home had risen by 6%, but this average is calculated from drastically different peaks and troughs.
In the South West, the cost of moving has risen by a huge 21%, nearly four times the national average. Moving to a more affordable area will bring down all these hidden costs, and the cost of the property too. It may sound obvious, but this is the best way to save money.