Selling your home to buy a small cottage by the sea may seem like a dream, but with the costs of moving rising, it is no surprise that the little cottage may just stay a dream for a lot longer than you’d have liked.
Moving home can be expensive! From estate agent fees, EPC costs, additional deposit for the new property, survey costs, stamp duty, legal fees, removal costs, gas safety checks, domestic disconnections (and reconnections!) and even a change of locks – All of these aspects do not come cheaply!
Unlike when you purchased your first home – you now have an additional cost: Estate Agent fees! For the UK, the average agency fee is 1.3% of the sale value but can range up to 3.5%. Additionally, these fees do not include VAT so ensure you add this on. Comparing fees early on will allow you to save money upfront.
On top of this you will need to pay for EPC certificate which can be an additional £50.00 and conveyancing costs for the sale of your property.
EPCs are valid for 10 years, and you can use the one purchased by the previous owner.
So, you may have an EPC and not know it!
With stamp duty changing in 2014, instead of being bundled into one big bracket for the cost of your property, you can benefit from reduced stamp duty costs by the % owed being divided up by groups.
The Gov.uk website breaks this down nicely:
Although this saves a sizeable cost from the days of yore, it is likely that stamp duty will still be your biggest cost when moving home. Take time to identify how much you can offer based on how much you have to spend on stamp duty – it is easy to become carried away when putting an offer in on a house, and although now it doesn’t matter as much if you slip into the next bracket, it will still up your costs!
Next you have legal fees, which can be calculated by looking at 0.5% of the property price you are purchasing. Of course every conveyancer will charge differently depending on works being completed. For instance, if you are looking for conveyancing for a new build property outside of London, you will be looking at lower fees than for a leasehold property in London with the need for a lease extension.
Ensure that you gain a full quote upfront with your solicitor – including searches and any extra works needing to be carried out, such as lease extensions. Request that they state this is the total cost and be sure to notify them if there is any involuntary extensions applied for. This will protect you if further works need to be completed to avoid unexpected legal fees.
You will need to have a survey from your mortgage provided and cost from £250 upwards. This survey is required if you are obtaining a mortgage and details the valuation of property – ensuring it is worth the money you have agreed to pay for it. If you are cash purchasing the property – this will not be applicable, so it would be wise to have a survey to understand the true cost of the property and that you secured a good deal.
Additionally to the mortgage survey, you may want to get your own report which can be up to £2000. There are three options here:
Removal costs vary. We’ll hold our hands up and say that it all depends on where you live, the property you live in, how many bedrooms you have and if you really want to take the grand piano with you! It also depends on how far away you’re moving from your original address. Be sure to get a fixed quote which includes insurance of your items.
Consider those little extras, changing the locks on your new home, disconnecting your BT line, Internet, Virgin Media or Sky and reconnecting it at your new property – also book this in, in advance! The last thing you need is to be in your new home for three weeks waiting for the engineer!
The rule of thumb is to allow for your stamp duty (calculate accordingly!) + 0.5% of the property price for legal fees, + 0.5% of property price for all those little added extras!
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