Moving Home - The Costs to consider...
Buying your first home or moving to another home is usually a sense of great enjoyment at the fact that you will be living different and new but can also be a time of great stress as you try to juggle different costs, what has and hasn't already been paid and getting used to the new bills when you actually move it. So what are the costs of moving and what should you think about? Here is a little help;
Cost 1 - Estate Agency Fees
This is only applicable if you are selling a property. EA fees are paid by the vendor (seller or the property) so you will only pay this on the property you are selling. Typically Estate Agency fees are as a percentage of the sale price and usually are anywhere between 1%-2% of the sale price. There are some flat fee options from some EA's but you should expect to do more of the selling of the property yourself as the flat fee is lower than a percentage deal. One thing to remember is that VAT is chargeable at 20%, so whatever the charge for selling, add 20% to it.
Cost 2 - Legal Fees & Stamp Duty
You should use a solicitor to act for you on the purchase and sale of a property and the price is typically dependent on the value of the property. The higher the value, the higher the legal fees. Your conveyancer (another word for your solicitor) will be able to confirm them to you prior to acting for you. On top of the legal fees, you will need to pay for search fees on yourself and the property and these are usually around the £300 mark. The last one is the dreaded stamp duty land tax. This amount depends on the type of buyer you are (First Time Buyers get the benefit of having the Stamp Duty waived up a certain amount) and also the value of the property (the higher the value, the higher the percentage you will pay in stamp duty). Again your solicitor can confirm this to you.
Cost 3 - Mortgage Charges
Assuming you are getting a mortgage there may be some charges. Typically a Mortgage Broker (someone who will search the whole mortgage market for you and come up with the best options) will charge a fee which can be as low as £250 and as high as 1% of the mortgage borrowing, although some are completely free of charge. There may also be an application charge with the lender. On average this is around the £999 and can be added to the mortgage if you wish but again some mortgages come with no charge at all.
Cost 4 - Valuation/Survey Costs
This is to make sure the property you are buying is worth the money you are paying for it and depending on the survey you get, it may also give you alot of detail on the condition of the property. As a minimum, if you are getting a mortgage, you will need a mortgage valuation. This is the cheapest option and is more for the lender to ensure that the property they will secure their money on is worth the price you are paying. This is done by the lender and the cost will depend on the value of the property. There are two other options that are available, firstly a Homebuyers Report which will be used if you are not getting a mortgage or you want more detail about the structure of the property and then the most expensive and informative survey is the Full Structural and that tells you what you may need to do to the property and highlights anything you should be aware of with regards to the structure of the property. These can be carried out by some lenders or you can find a local surveyor who will charge you directly.
Cost 5 - Removal Costs
This is a cost that alot of people avoid by moving their belongings themselves by simply hiring a van. Obviously, getting a removal firm to do it saves you the hassle and physical exertion of doing it yourself but it does come at a price. There are different options from merely moving everything you have already packed to a full packing and unpacking service so speak to some local companies about their different options.
Typically the only charges you will have to pay upfront are any mortgage survey fees, around £500 to the solicitor so they can start the various searches and maybe a deposit to the removal company. All other charges will typically be paid on exchange of contacts or full completion.
If you have any questions on any of the content in this blog or would like to go through a FREE Costs of Moving tool,
please do not hesitate to contact us on 01256 345630 or email us at firstname.lastname@example.org or feel free to enrol in one of our Financial Education Seminars.