The hidden costs of moving house
Moving house is never a cheap business – but it's a great feeling when everything's finally gone through!
Once you’ve found the home of your dreams you’ll want to get things moving as quickly as possible.
Here’s a list of what might cost you extra cash up front, which you might not be told about at the start of your house-buying journey.
You could be looking at finding an extra £10,000 – and that’s on top of your deposit.
Deposit: To help get a better mortgage rate – and because lenders require you to pay at least five per cent of a property’s value up front – the deposit is probably the biggest outlay you’ll have when purchasing a house as a first time buyer. You may think paying 25% up-front to secure the best deal is the right way forward for you – and this would cost you over £55,000 for the average home*. A ten per cent deposit on the average house value will be around £22,000.
Mortgage arrangement fee: A new mortgage can cost up to £2,000 in fees, and while some are fee-free, that advantage may be reduced through higher interest rates. You may not have to pay this up front – but if it’s added to the loan you’ll be paying interest on it over many years. There could also be an additional booking fee to secure certain mortgage deals.
Valuation fee: The lender will need to value your new house to work out how much to lend you. It varies with the value of the property but will typically cost between £200 and £500 for a basic valuation.
Broker fee: If you are using a broker or adviser, they may also charge a fee. Expect around £500.
Life insurance: Some lenders may insist on life insurance to ensure their risk is covered in the event of your death. But it can be a good idea in any case, to remove any worry for your family. A monthly fee shouldn’t be too expensive – around £15 per month for a healthy 30-year-old.
At the solicitor’s:
Stamp duty (organised by your solicitor) is a tax on land and property transactions and charges according to the purchase price. For a £300,000 home, for example, it would be £5,000. On a £200,000 house it would be £1,500 and if your home is under £125,000, there’s no Stamp Duty to pay.
Surveys: It’s important to make sure your house is solid and safe, and a surveyors’ report – costing around £400, will usually do the trick. There’s a cheaper option for new build homes.
Solicitors’ fees: Your solicitor makes sure everything goes according to plan and is legally correct through the conveyancing process. Making sure the contracts are in order, the sale is logged with the Land Registry and that everything is paid on time costs a total of between £500 and £1,500. This also covers accessing title deeds, money-laundering checks, local authority searches for planning applications lodged nearby, anti-fraud checks, and transfer of ownership.
Instantly moving money on completion day (also by your solicitor) costs extra but is vital. Probably only about £25.
If you are also selling a house, factor in estate agency fees, often a percentage of the sale price. And an Energy Performance Certificate, which helps people compare the energy efficiency of your home.
When you’re ready to move:
Removal company: Some will pack everything into boxes as part of the deal but even if you decide to do it yourself, you may need to hire a van for the day. Getting the professionals in could come to over £1,000 for furniture to fill a three-bedroom house.
New buildings and contents insurance: Your home needs to be insured from the day you legally exchange contracts as it is from this point that the property becomes the risk of the buyer. Try The Nottingham for a no-obligation insurance quote.
Council Tax: If you’re moving up in the world, because council tax is based on the property valuation, you may move into a higher band and have to pay more.
Lick of paint/carpet/curtains – and if it’s your first home you may also need a fridge when you get there!
Redirecting mail: £63 for a year from the Royal Mail. This should catch everyone who writes to you.
Storage of excess furniture – if the moving dates don’t match, this may be an added expense.
Updating your driving licence – it’s free through the DVLA but you could be fined £1,000 if you fail to do it.
Utilities – do let the energy and water firms know – as well as the TV licensing people or you may be in line for a fine there, too. Some online companies will do all this for you, free of charge.
*Government figures show the average property value in the UK in April 2017 was £220,094, while in England, the average was £236,519.
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