The hidden costs associated with moving home
It’s no secret that moving home in the UK isn’t a cheap or stress free task and sometimes you can feel like you’ve been metaphorically slapped in the face with a big old fee that you didn’t realise was required – by either the estate agent, your solicitor or those nice people in Government.
To avoid that from happening, and to prepare you for the trials ahead, let’s break down the hidden costs associated with moving home; you might be surprised at how much you actually have to hand over:
First, you have your deposit, which you’ve worked so hard to save up for probably over a few years. The percentage required depends on if you are simply buying on the open market or taking out a Help to Buy backed mortgage that only requires 5% of the property’s value. Right to Buy and Shared Ownership schemes also help reduce that percentage. However, it’s a good idea to save over the bare minimum of what is required. Those looking to buy should save around £10,000 to £40,000 when considering a £200,000 house.
Stamp Duty is another hidden cost, associated with moving home, but is only applicable if the property you are buying costs £125,0001 or more. If you want to find out exactly how much you will pay for a property you are considering head to www.moneyadviceservice.co.uk and have a play with their Stamp Duty calculator.
Next you have your valuation fee to think about and these can amount to a shocking £1,500. What does this money get you? You might ask. Well, this charge covers the cost of your potential mortgage lender valuing your property and then deciding how much money to offer you. It’s a questionable fee but one that needs to be added to your outgoings list.
Talking of questionable fees, you could also enjoy the hidden cost of an electronic transfer charge that your solicitor and mortgage lender ask for. This isn’t quite as stomach dropping as £1,500 but could still set you back around £40-£50. Your solicitor will also have their hand out for £250-£300 to conduct a local search plus up to £1,000 in legal fees which covers their management of the paper and legal work.
If you are selling a home your estate agent will also require payment, for listing your property. Estate agents in the UK sell over 90% of properties and many come with mixed reputations, you could consider another option and cutting them out completely.
A good alternative is House Simple, a site set up to help you save money and suggest that the average commission taken by estate agents is 1.8% – apply this to a property valued at £296,387 (House Simple’s average property price listed on the site) and that results in fees of a whopping £6,402.
If you opt to sell online the site’s average fee is just £419+VAT. That’s a saving of £5,899. Shop around and beat those hidden fees.
Did you realise that there are also surveyor fees to think about? Well, that £5,000 saving might come in handy because on average these can amount to £1,000 for a full structural survey – however this probably won’t find everything wrong with the property.
To top it all off, don’t forget your actual moving fees for van hire and boxes for packing! It’s probably a good idea to take any free financial advice you can if it’s offered to you and rope in family and friends if they can help with any costs and moving boxes on the day.