What are House Moving Costs?
If you’ve been thinking about buying a house, you’ll be daydreaming about how many bedrooms you need, what the garden is like, if it’s in the right school catchment area or if it has a garage – amongst many other things we’re sure!
These are all important factors when deciding on a new home, and it’s probably the case that the emotional heart will rule.
But, sit back and work out the financial implications of moving house too – it may be acting with the head rather than the heart in this case, but it’s an important part of your planning for this exciting next chapter in your life.
Here at Mindful Mortgages we have the expertise to take you through some of the critical factors when thinking about the financial aspects of moving house.
Stamp duty (or Stamp Duty Land Tax (SDLT) to give it its full name) is a fee charged by the treasury that’s paid on property purchases. If you buy a property or land in England that’s over a certain price, you have to pay Stamp Duty. How much you pay depends on several factors, but you should expect to pay a certain percentage of the value of the property. There is also a higher stamp duty rate for anyone purchasing an additional property. In any property sale where it’s required, stamp duty must be paid by the buyer rather than the seller and it needs to be paid to the HMRC within 14 days of completing the process of buying a home, and your solicitor will usually deal with this, so make sure you’ve budgeted for it.
There are a number of websites that offer a Stamp Duty Calculator, but we recommend going directly to the calculator on the Government website to calculate and it will also tell you what it’s all about. For more unusual circumstances, there is also a Stamp Duty helpline (0300 200 3510) which is really useful.
Estate Agent Costs
If you’re selling your house, then your estate agents’ costs will need to be factored in. The fee varies, depending on the level of service that will be delivered to you or whether you choose a local or internet-based agent, but you can expect to pay between 1% and 3% of the sale price plus VAT at 20%.
The Legal Fees
Aside from the actual cost of the house and the mortgage repayments, one of the first things to do is think about the legal fees. Conveyancing companies and solicitors are the ones who focus on property. We can arrange a Conveyancing quote for you. Email us to request your quote and we’d be happy to help.
The solicitors will also look at searches that will be needed, such as local authority searches, existing planning permissions and specific things such as mining reports and building regulations. Why not have a look at our ‘6 Step Guide to the Conveyancing Process’ blog for some more information.
A survey is a detailed inspection of a property’s condition that tells you if there are potential structural problems or signs of subsidence. It will also highlight any possible major repairs, such as the condition of the roof. It is usually a good idea to arrange your own house survey to assess the condition of the property, so you know exactly what you are buying and whether you are going to face any significant repair bills when you take ownership. You will be required to pay for an independent survey, which can sometimes seem like an unnecessary expense on top of everything else, however, it’s far better to be aware of any problems before you buy a property, so you can make an informed decision about how much you’re willing to pay for it and, if necessary, budget for any repair work that needs doing. There are different levels that provide varying reports, a basic survey could cost around £250, through to a structural survey which can cost from £500 to £1,500 depending on the condition of the property. You can read more on surveys over on this blog.
Most people will have to obtain a mortgage to buy a house. The costs and fees will vary depending on the lender and the individual product, but there are several typical costs associated with a mortgage. There could be booking fees and arrangement fees (not always), and because the lender will need to know the value of a property, they may also charge a valuation fee. Booking fees can be between £150 and £300, arrangement fees might be anywhere from £195 to several thousands of pounds, and a mortgage valuation fee could be anywhere between £150 and £1,500 depending on the lender and the property. It’s worth noting that low rates might not mean low fees, so be careful to look at the details. Below is a list of fees to consider:
Deposit: You’ll need to put down a deposit which will be discussed when you look into your mortgage options. If you’re already a homeowner, then the deposit may be paid out of the equity in your current home. We regularly deal with Equity Release mortgages here, if you are needing help with yours or want to discuss your options, please do get in touch.
Valuation fee: Some lenders will charge you a valuation fee which allows them to make sure they are happy to lend on the property you are buying. It can range from being free, up to £500.
Transfer fee: Many mortgage providers add a fee of around £30-50 to transfer the money to your solicitor for the property purchase.
Arrangement fees: These are the fees charged by the mortgage lender to set up a mortgage, and they can range from a few hundred to a few thousand pounds. In some cases, you can find mortgages with no arrangement fee, and some lenders will give you the option to add the fee to the overall cost of the mortgage. Keep in mind that if you add the fees to your mortgage, you’re likely to pay more due to interest on the combined figure.
Mortgage Broker fee: If you choose to use a Mortgage Adviser and benefit from the value and service they will bring, they may charge you a fee to look after you. It’s for you to decide who you feel will best look after you and what benefit you will get by working with them.
You may need a removal company to help you on your all-important moving day, particularly with transporting big items. The cost of this will vary because companies will calculate their costs based on such things as how many bedrooms, the distance between houses, and whether specialist services are required. It could be as little as £400 to well over £1,000. Our advice is that you decide precisely what you need and then shop around to get quotes and see what the customer service is like. Have a look at online review sites too as these could give you a good indication of how good a company is. We have looked at removal costs in more detail on our blog.
Buildings and Contents Insurance
When you’ve completed, hopefully you’ll quickly get the keys to your new home (the best part)! It’s an exciting time, and you’ll have packed everything, the removal van will be ready, and you probably can’t wait to get in. Something you need to do straight away though is the insurance. Once the property is yours (in fact we recommend from the moment you exchange contracts), it needs to be insured. You’ll need buildings insurance (which is also a condition of a mortgage) to cover the bricks and mortar, and contents insurance too as this will cover your belongings and possessions. The cost of this will vary because no two properties are the same, and you will have different possessions. The key is to do your research and get everything in place before the day, and then it should just be a case of pressing the button to confirm! You can head to our page to find out more about Home Insurance or to get a quote.
Repairs and decorating
Even if your new home is pretty much perfect for you when you move in, there are bound to be a few things that might need to be fixed in an older property, and of course you may be itching to decorate and put a stamp on your new home, so it’s always a good idea to budget for this too.
No one can truly predict the future. But having cover in place means you and your loved ones can prepare for any eventuality. Even with a small policy, you may find yourself sleeping a little easier at night knowing that your family has protection in place should something happen to you. We can guide you through this process and recommend a bespoke and comprehensive package to suit your needs and your budget.
The types of cover we can arrange for you include, Life Insurance, Critical Illness Cover, Income Protection, Private Medical Insurance, Family Income Benefit, Home Insurance and Business Protection. To find out more head to our Protection page.
For help with any of your dream home needs including mortgages and protection, head to our booking link or email firstname.lastname@example.org – a member of our friendly team will always be happy to help.