There is so much to think about when moving home. Even just hunting for a property can feel overwhelming in itself. Don’t even mention trying to save for a deposit and getting a mortgage. But before you do anything else, it’s important to budget for all the different costs involved.
Legal fees, stamp duty, home insurance, the list can often feel endless.
Here’s a list of some of the expected costs you’re likely to face when moving house. This will help you build a moving budget.
1) Legal Fees
This may also include:
- Anti-money laundering checks to confirm your identity (£6-20)
- Property, drainage and environmental searches (£200)
- A land registry fee for transferring your name (£200-300)
- If you have been gifted money to buy your new property, you’ll need to fill in paperwork to prove the money has come from a legitimate source.
2) Surveyor Fees
Unless your mortgage requires it, getting a home buyer survey done isn’t essential. However it’s a sure-fire way to prevent costly repairs down the line. Your surveyor will do a detailed inspection of the condition of the property. This includes the windows, roofing, walls, pipes and gutters.
You can choose from 3 types of survey, depending on the amount of detail you need. An RICS Home Condition Report is the most basic type, and will cost roughly £400. A RICS Homebuyers Report is the next step up and could cost up to £1000. A RICS Building Survey is the most comprehensive survey you can expect to pay up to £1,500.
The costs are just estimates, so it’s worth shopping around to find the best deal.
3) Stamp Duty
If you’re buying a residential property or piece of land in England or Northern Ireland, you’ll have to pay Stamp Duty Land Tax. That’s only if it costs more than £250,000.
Stamp Duty rates are fixed until 2025 at the moment. The amount you have to pay is based on Stamp Duty bands, which factor in whether you’re a first time buyer or buying a second home.
If you are a first-time buyer, then you don’t have to pay Stamp Duty on properties costing up to £425,000.
Probably the most substantial of all the costs to bear in mind is your deposit. When buyer a home, unless you are in a fortunate position to be a cash buyer, most people put down a deposit and take out a mortgage on the rest.
In most cases, you need to put down at least 10% of the property price upfront (you can get a 5% deposit mortgages, but there is a lot of terms and conditions that come with those). The more you can save up, the better, as you’re more likely to bag a competitive mortgage deal, and you’ll have less to pay back in interest in the long run.
Let’s say you are buying a house worth £350,000, you’ll need at least £35,000, but if you can put down 20% (£70,000), then that’s even better.
5) Mortgage Fees
While on the topic or mortgages, here’s some typical costs you can expect to pay when taking out a mortgage.
Arrangement Fee – This is the fee for the mortgage products, some lenders allow you to add this to your mortgage, but this will increase the amount you owe, so try to pay it upfront. An arrangement fee can set you back anything from £0-2000.
Booking Fee – You might be charged a booking fee when you apply for a mortgage deal and unfortunately it’s not usually refundable, even if your mortgage falls through. Some providers include it as part of the arrangement fee. It’s usually around £99-300.
Valuation Fee – When taking/ out a mortgage, the provider will value your property to make sure that it’s worth the amount you want to borrow. As they only look at the property value, not any potential problems, it may be worth getting your own survey done as well. You can expect to be charged £250-£1,500 depending on the value of the property.
Mortgage Account Fee – Charged at £100-£300, this fee pays for the lenders administration costs in setting up, maintaining and closing your mortgage.
Missed Payments – If you account is in arrears, you might be charged. The penalty for missed payments differs depending on the lender, so it’s always worth checking your lenders terms and conditions.
Mortgage Broker Fee – If you choose to hire a mortgage broker, this will come at a cost- usually between £300-£500. Although some mortgage brokers won’t charge a fee and instead take commission from the mortgage provider.
Higher Lending Charge – Not all lenders charge this. It’s only likely to be needed if you have a small deposit, as this pays for the lenders insurance if you can’t repay the mortgage. The fee is usually 1.5% of the mortgage.
Early Repayment Charge – This fee might not always apply, so check the rules if you think you’ll want to make an early repayment in the future. Typically the charges range from 1%-5% of the value of the early repayment. This covers lenders costs if you repay all or part of your mortgage earlier than the agreed term or deal period.
6) Cleaning Fee
Living in rented accommodation? There’s a chance you’ll have to pay a cleaning fee when you move home. Take a look at your contract to see what your landlord has requested at the end of your tenancy. Professional end of tenancy cleaners usually charge more than your everyday cleaners as it’s considered a more thorough job. Of course, the price will depend on the number of rooms and the location of your house. You can expect to pay roughly £20-£25 an hour.
Unless you’re the proud owner of a van – or know someone who is, it’s likely you’ll have to pay a removal company to transport your stuff when you move house. According to Zoopla, the average house removal for a 3 bedroom home is around £880. But obviously it will depend on how much bulky furniture you have to shift. You might need the help of a removal person to physically manoeuvre your stuff.
Sometimes, your move out and move in dates don’t match. It’s frustrating, but whether you need to store a huge sofa or just a few boxes of clothes, there are plenty of options to ease your transition from one home to another. The price you’ll pay depends on how much stuff you need to store. Check out the average cost of self-storage across the UK for a rough idea.
9) Ongoing Costs
Unfortunately the fees don’t stop once you’ve got the keys to your new pad. There are several ongoing costs you’ll need to be aware of, which depend on the type of property you’re buying.
Everyone has to pay council tax, which goes towards funding services. You can check how much council tax you’ll owe online. If you live alone, you might be able to get a reduction on the amount you pay.
Bills – Like broadband, water and electricity – are another ongoing cost. You’ll have to pay these regardless of whether you rent or own. It’s worth checking which deals are available in your new area.
While home insurance isn’t a legal requirement, it’s likely your mortgage provider will ask that you take out buildings cover at the very minimum. A combined buildings and contents policy costs £137 per year on average. It’s worth considering if you know that if anything happened to your stuff, you couldn’t afford to replace it.
If you’re buying a property with a lease, don’t forget to factor in lease holder fees, payable to the landlord. There are 3 types of leaseholder charges: Service charge, ground rent and administrative charges. Make sure you understand how much you’ll have to pay for each before you exchange contracts.