Homeowners spend £14,000 when they move home. Here are the biggest expenses

Moving home can be an expensive endeavour. From Stamp Duty to legal fees, the costs can really add up. If you’re moving home soon, don’t forget these expenses.

According to research from Which?, the cost of moving home has increased thanks to rising property prices. Some services, such as solicitors or estate agents, may base their fees on the value of the property you sell or purchase. So, while rising property prices may have helped you sell your home for more, it could cost you too.

While house prices stagnated in October, they were still 8.3% higher when compared to a year earlier, data from the Halifax House Price Index shows.

Inflation is also likely to affect the costs of moving. The cost of living is rising at the fastest pace in four decades. As a result, you can expect some things, from hiring a removal company to new furniture for your home, to cost more.

Which? estimated that existing homeowners spent more than £14,000 when they moved in 2022 – a 21% increase when compared to 2021.

First-time buyers face a much smaller bill, but the total was still 6% higher than a year earlier at £2,200.

If you’ll be buying and selling property, these are the largest costs you need to factor into your budget.

1. Stamp Duty

Stamp Duty is a tax you pay when you purchase property or land. The Which? research estimates that the average homeowner faced a bill of £6,500 in 2022.

However, the rules have changed, and it could mean the amount of Stamp Duty you pay is far less than you expect.

In October, the Stamp Duty threshold was increased from £125,000 to £250,000. So, if the value of your property you’re buying is below this threshold, you will not need to pay Stamp Duty. If the value exceeds this threshold, your bill will be lower than it would have been just a few months ago.

The amount of Stamp Duty you pay will depend on the value of the property. The new rates are:

• 0%: The first £250,000
• 5%: £250,001 – £925,000
• 10%: £925,001 – £1,500,000
• 12%: More than £1,500,000.

So, if you purchase a home worth £350,000, the first £250,000 would be exempt from Stamp Duty. The remaining £100,000 would be liable for Stamp Duty at a rate of 5%, resulting in a bill of £5,000.

First-time buyers can purchase properties worth up to £425,000 before Stamp Duty is due.

If you’re buying an additional property, such as a buy-to-let investment or holiday home, there is a 3% Stamp Duty surcharge.

2. Estate agent

The second largest cost, according to Which? is estate agent fees, which come in at £4,544. Usually, the fee is a percentage of the value of the home you’re selling, so it can vary significantly.

You may be able to negotiate the fee and it’s worth shopping around. However, it’s not just the fee you should focus on. While it could cost you more, a well-regarded estate agent could help you sell your home for more and make the process easier.

3. Conveyancing

Unsurprisingly, solicitor fees are third on the list of the largest expense at £2,003. Again, the cost is often linked to the value of the property you are selling and buying, so make sure you understand the fee structure before choosing a conveyancer.

4. House survey

A house survey can give you an insight into the property you’re buying and put your mind at ease if you have any concerns about its condition.

There are several different types of surveys you can choose.

A condition report is a basic survey that highlights risks or defects using a traffic light system but it doesn’t offer any advice. The most comprehensive type of report is a building survey, which will include an analysis of the building’s structural integrity, including looking under floorboards and behind walls. A building survey is usually only advised for older properties or those that are in noticeably poor condition.

Depending on the type of survey you choose, it can cost between £250 and £2,000, but the average is £456.

5. Removals

If you plan to hire a professional removal company, you should set aside around £649 to cover the bill the research suggests. While it increases the cost of moving home, it can be a worthwhile expense. It can make the moving process much smoother and less stressful.

6. Energy Performance Certificate

You need to get an Energy Performance Certificate (EPC) before your property goes on the market if you don’t already have a valid one. It must be available to potential buyers.

An EPC shows how energy efficient your property is and the cost of potential improvements. You can find a list of approved EPC organisations on the government website. The average cost of an EPC is £55.

Contact us to talk about how much your mortgage could cost

While we can’t help you save money on a removal van or reduce your estate agent fees, we could help you secure a competitive mortgage. There are lots of mortgage providers to choose from, including some that don’t have a high street presence. So, it can be difficult to understand which ones are right for you and could cut your repayments.

We’ll work with you to understand your needs and support you throughout the application process. Please contact us to talk about your mortgage.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.