A breakdown of the costs involved in moving houses

Moving houses is the start of a new and exciting chapter, however, it can be a stressful and time-consuming process. Whether you are relocating for your new job, downsizing your home, or simply wanting a change of scenery, moving houses involves a lot of tasks and things to think about, especially in terms of finances. Being aware of the different expenses you will have to pay, such as estate agent fees, removals services, stamp duty and of course your rent and utility bills, is vital before planning your move. This blog will guide you through all the possible costs that are associated with moving houses in the UK.

1. Estate Agent Fees

Working with a reputable estate agent will ensure your current property sells quickly and for an optimal price. Estate agents typically charge 0.75%-3.5% of the final selling price. Make sure to do your research and negotiate these expenses to ensure that you are not getting overcharged.

2. Conveyancing Fees

Conveyancing refers to the legal process of handing over property ownership from the seller to the buyer. Solicitors and licensed conveyancers usually operate this process and charge prices for their services. These fees depend on the complexity of the transaction however usually are in the range of £500 to £1500.

3. Stamp Duty Land Tax (SDLT)

If you are buying a property in England or Northern Ireland, you will need to pay Stamp Duty Land Tax (SDLT) if your property values more than £250,000. The rate of your stamp duty is fixed until 2025 and depends on your SDLT band, which factors in the purchase price of your property, and whether you are a first-time buyer or buying a second home. The good news is that if you are buying a home for the first time you are exempt from paying SDLT on properties valued up to £300,000. If you are purchasing your second home or are buying to let, you will need to pay an additional 3% stamp duty surcharge on top of your set rate. We know this all sounds super complicated, so to make things simpler, use this handy stamp duty calculator!

4. Survey Costs 

Before finalising your purchase of a property, having a homebuyer survey conducted is a good idea to identify any issues and prevent costly repairs at your new home. Your surveyor will run an in-depth inspection of your property, including the windows, roofing, walls, pipes and gutters to make sure there is no damage. Although this process isn’t mandatory unless your mortgage requires it, having this survey done means you will move into your new home with relief that there will be no surprises of unnoticed damage or malfunctions. Furthermore, if the survey detects any problems, you can always try to negotiate a cheaper price for the property with the seller. Surveyor fees depend on the type and size of your property but typically range from £250 to £1000. You can compare surveyors near you on the RCIS website.  

5. Deposit 

When buying a home, your deposit is likely to be the most substantial cost to consider. It is a standard nowadays to put down a deposit and take out a mortgage for the rest. Usually, a down payment of at least 10% of the property price is required. However, the more that you can pay upfront the better as you will then have less interest to pay back overtime and will have a higher chance of an ideal mortgage deal.

6. Mortgage Fees

When taking out a mortgage to buy a new property, here are some costs you could expect:

Arrangement Fee

Also known as the product fee, this is the fee that lenders charge to set up your mortgage deal. Some mortgages do not have arrangement fees, but usually this can cost up to £1500. Many lenders advertise an eye-catching low mortgage interest rate but with a very high arrangement fee. Some mortgages allow the option to add your arrangement fee to your mortgage however this is not recommended as you will end up paying interest on it for your whole mortgage term.

Valuation Fee

The valuation fee covers the process of your lender arranging a professional valuation to ensure that your property value is worth the amount you want to borrow. This fee usually is in the range of £100 to £200. If the valuation concludes the property isn’t worth how much you want to borrow, your lender will lower the amount of money they are willing to lend you.

Telegraphic Transfer Fee

The expenses incurred for the mortgage lender to transfer money to the property’s seller. This typically costs between £30 and £60.

Mortgage Account Fee

Depending on the lender, you may need to pay a mortgage account fee, which is the charge for managing your mortgage account. This is a one-off payment that you may be able to pay when you complete your mortgage. In this case, this is also referred to as an exit fee. You can pay up to £300 for this. It is rare that you would need to pay both an account fee and exit fee. If you are lucky, some lenders don’t charge for this at all!

Mortgage Broker Fee

A Mortgage Broker can search the market on your behalf and match you with the best deals you are likely to be accepted for. If you decide to hire a Mortgage Broker, you can be looking to pay a fixed rate, ranging from £400 to £700. Some mortgage brokers may not charge a fee and instead take a percentage of commission from the mortgage provider. 

7. Home Insurance

To protect your property from any unforeseen circumstances such as theft, fire and damage, arranging home insurance is essential. It is likely that your mortgage provider will make it a requirement that you get buildings cover at the bare minimum. Investing in content insurance may also be a good idea if you want to cover the cost of damage to your belongings within the property. The cost of your home insurance premium can depend on factors such as the size, value and location of your property. On average an annual premium for buildings and contents insurance is around £160 a year.

8. Removal Costs

Moving on from the admin related finances of the moving process, now it’s time to think about how you are going to move all of your belongings to your new home. Hiring a professional removals company will ensure that your boxes and furniture will be handled smoothly and securely. The cost of your removal depends on the quantity of items you have, and the distance travelled, but on average a removal for a 2-bed home costs approximately £700.

9. Storage

You may decide you want to put some things in storage during your move. Putting items in storage means you don’t need to unpack everything at once at your new home and retrieve the items when you need them. If you have a gap between your tenancy end and start dates between your old and new home, storage is the perfect solution to ease the transition. Your quote for storage depends on how much and how long you want to store. There are many storage options out there, with some offering by-the-box storage and others offering storage units. Packing and collection services are also available as add-on services. Browse through your storage options here and decide what works best for you.

10. Other expenses – utility connection fees, cleaning fees, council tax, renovations and repairs.

You’re probably thinking, there’s more!? Sadly, there are going to be ongoing expenses that in most cases, everyone must pay, in any property type. Everyone in the UK pays council tax: you can find how much you need to pay by entering your post code here. Living costs also involve bills such as your broadband, water and electricity. Renovations and upgrades that you wish to be done in your new home will incur further expenses.

And that’s it! We know that there is a lot of information to sink in here but by understanding all the costs involved in a house move, you can avoid any unexpected charges and ensure a smooth transition to your new home. Conducting research into competitive rates, seeking professional advice from estate agents and mortgage brokers, and negotiating for fair prices where possible, will ensure you have all the expenses under control! Happy moving, and good luck!