Moving home: the different costs involved
There’s a lot to think about when moving house. Just finding a property can feel overwhelming in itself, not to mention saving 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 feel a bit endless. Here’s a comprehensive guide to the costs associated with moving home so you can factor them into your budget and you don’t have to worry about any pesky surprises.
1. Legal fees
There are some other costs you might have to factor in too, including:
- Anti-money laundering checks to confirm your identity (£6 - £20)
- Property, drainage and environmental searches (around £200)
- A land registry fee for transferring your name (£200 - £300)
- If you’ve been gifted money to buy a property, you’ll need to fill in paperwork to prove the money has come from a legitimate source (up to £100)
2. Surveyor fees
Unless your mortgage requires it, getting a homebuyer survey done isn’t essential, but it’s a surefire way to prevent costly repairs down the line. Your surveyor will do a detailed inspection of the condition of the property, including the windows, roofing, walls, pipes and gutters. Getting a survey done can help to identify issues that your solicitor might want to look into, to save you from any nasty surprises after you move in. Plus, if there are any problems, you can always try to negotiate a lower property price with the seller.
You can choose from three types of survey depending on how much detail you want. A RICS Home Condition Report (HCR) is the most basic type, and will cost roughly £400. A RICS HomeBuyer Report (HBR) is the next step up and could cost up to £1,000. A RICS Building Survey is the most comprehensive survey, which means you can expect to pay up to £1,500, depending on the value of the property.
These costs are all estimates so it’s worth shopping around to find the best deal – you can find and compare surveyors near you on the RCIS website.
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 (SDLT) if it costs more than £250,000.
Stamp duty rates are fixed until 2025 at the moment, and 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, among other things.
If you’re a first-time buyer, good news! You won’t have to pay Stamp Duty on properties costing up to £425,000.
Use this stamp duty calculator to work out how much you’ll need to pay.
4. Deposit
Probably the most substantial of all the costs to bear in mind is your deposit. When buying a home, unless you’re fortunate enough to be a cash buyer, most people put down a deposit and take out a mortgage on the rest.
Typically, you need to put down at least 10% of the property price upfront. But 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’re buying a house worth £500,000 – you’ll need at least 10% (£50,000) but if you can put down 20% (£100,000), then that’s even better.
Struggling to save up? It can be a challenge, particularly if you’re buying alone or trying to reach a big savings target within a short space of time. Try our tips for gathering a sufficient house deposit.
5. Mortgage fees
Here are some typical costs you could expect to pay if you’re taking out a mortgage:
Arrangement fee
This is the fee for the mortgage product (sometimes known as the product or completion fee). Some lenders allow you to add this to your mortgage, but this will increase the amount you owe and the interest you’re charged, so pay it upfront if you can afford to. It’s also worth checking if the fee is refundable. An arrangement fee can set you back anything from £0 to over £2,000.
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 mortgage providers will include it as part of the arrangement fee. It’s usually around £99 - £300.
Valuation fee
When you take out a mortgage, the provider will value your property to make sure that it’s worth the amount you want to borrow. As they’ll only look at the property value, not any potential problems or structural defects, you might also want to pay for your own survey for peace of mind. You can expect to be charged £250 - £1,500 depending on the value of the property.
Telegraphic transfer fee
This fee pays for your mortgage provider to transfer the money to your solicitor. Bear in mind that it’s usually non-refundable, although it shouldn’t cost more than around £50.
Mortgage account fee
Charged at £100 - £300, this fee pays for the lender’s administration costs in setting up, maintaining and closing your mortgage. If you’ve paid this, then it’s unlikely that you’ll need to pay the exit fee, but you might still have to pay an early repayment charge if you end the mortgage early.
Missed payments
If your account is in arrears, you might be charged. The penalty for missed payments differs depending on the lender, so it’s worth checking your lender’s terms and conditions. Don’t forget that failure to make your mortgage repayments could also result in your home being repossessed.
Mortgage broker fee
If you choose to hire a mortgage broker, this will come at a cost – usually between £300 and £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 and it’s only likely to be needed if you have a small deposit, as this pays for the lender’s insurance if you can’t repay the mortgage. The fee is usually 1.5% of the mortgage (for example, £3,000 on a £200,000 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 lender costs if you repay all or part of your mortgage earlier than the agreed term or deal period.
Exit or closure fee
This is a fee you pay to your lender when you repay your mortgage, even if you are not repaying early. If you’ve already paid the mortgage account fee then you might not need to pay this one, which should fall around the £75 - £300 mark.
6. Cleaning fees
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, but you can expect to pay roughly £20 - £25 an hour.
7. Removals
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 cost for a 3 bedroom home is around £880. But obviously it will depend on how much bulky furniture you have to shift and whether you need the help of a removal person to physically maneuver your stuff.
Need a hand with removals? LOVESPACE will collect and deliver on the same day, and sort your storage if you need it. You can even book an optional packing and disassembling service, and we accept short notice home move requests if you’ve left it til the last minute.
8. Storage
Sometimes, your move out and move in date don’t align. 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, but check out the average cost of self-storage across the UK for a rough idea.
Looking for storage for moving house? LOVESPACE is the convenient alternative to self-storage. We’ll collect your stuff from your house at a time that suits you, then store it safely for as long as you need. When you’re ready to be reunited, we’ll bring your stuff to you at any UK address.
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 local services. You can check how much council tax you’ll owe in your new home by entering your postcode here. If you live alone, it’s worth checking if you can get a reduction on the amount you pay.
Bills – like broadband, water and electricity – are another ongoing cost. You’d have to pay these regardless of whether you rent or own, but it’s worth checking which deals are available in your new area. Remember to redirect your post and update your address details on any bills or subscriptions so they don’t fall through the cracks.
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, and 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 leaseholder fees, payable to the landlord. There are three 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.
Plus, there’s the chance you might have to fork out for repairs every now and then. For example, if a storm creates havoc for your roof or your boiler gives up – it’s best to have a stash of emergency cash for cases like these. Enjoy a bit of DIY? Here are 40 common home repairs you can fix yourself, if you’re up to the challenge.
And that’s it, your comprehensive list of costs to consider when moving home. It might seem exhaustive but the most important thing is that you’re on top of all the fees. Start budgeting as soon as possible and make sure you have some emergency savings before you complete on your home. Buying a house is incredibly exciting, but it’s important to be prepared!