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A Comprehensive Guide to House Moving Fees from Stamp Duty to Removal Costs

home buying guide

With the average UK home costing £253,521 (June 2018), buying a property is, for most people, the single biggest expense they will ever have to pay out. Whilst most people will rely on a mortgage to cover much of this expenditure, there are plenty of other costs associated with a house move which are important to factor in.

In this guide, we’ve taken a comprehensive view of all the costs associated with moving house so you know how much money you really have to buy your next home with.

Before you even begin looking at the market to consider a property, it is imperative that you understand what price range you can afford and this should include, not only the extent of the mortgage that you can be approved for but also, the associated costs of moving.

house buying and selling fees

There are lots of costs associated with buying and selling a home. Have you considered them all? Image via Pixabay.

If you are a first-time buyer then you won’t need to factor in costs such as estate agency selling fees but all buyers will need to consider costs such as:

  • Deposit
  • Mortgage arrangement fee
  • Stamp duty
  • Legal fees
  • Survey costs
  • Removal fees
  • Solicitors costs

And that’s just covering the main elements of a property purchase. Depending on the type of property you are buying, the kind of mortgage you are arranging and even the process of where you buy (such as an auction), there may well be additional charges that apply.

So, in order to understand what you can afford, let’s start by looking at the financial side of buying and selling a property.

Arranging a Mortgage

Most lenders do not offer 100% mortgages anymore and you will have to have a deposit to put down against the purchase of your home. Depending on the mortgage you arrange, this is usually upwards of 5% of the agreed price of your home.

Your mortgage lender will usually agree to fund the rest as long as you can meet the monthly repayments. Applying a ‘stress test’, lenders assess an applicant’s income along with fixed outgoings and assess the current (and future) rates at which the borrowing is calculated.

They will also assess your credit history and any debts that you have before giving you an idea of what they can lend you.

 

Many mortgage lenders will charge an arrangement fee to set up your loan, but this is often added to the cost of your mortgage rather than being an upfront charge. However, if you use a mortgage broker or an independent financial adviser then there may well be fees associated with using their services. Some receive commission from lenders based on their recommendations whilst others make a direct charge to the customer.

You should also be aware that some lenders insist on obtaining an independent valuation of a property but this too is often added to the cost of your overall loan. Such a report can cost from £150 to £1500.

Stamp Duty Land Tax

Also known as SDLT, this is a tax payable to the UK government when you purchase any residential property over the value of £125,000.

Since 2014, the rate of Stamp Duty Land Tax is applied on the proportion of the value of the property that falls into each charging band. The level of tax also varies if you are buying a second home or a buy-to-let property.

The current rates of SDLT are as follows:

Property (lease transfer) value First Property Additional Properties
Up to £40,000 0% 0%
£40,001 to £125,000 0% 3%
£125,001 to £250,000 2% 5%
£250,001 to £925,000 5% 8%
£925,001 to £1.5 million 10% 13%
Over £1.5 million 12% 15%

For example, if you purchased a house for £350,000 then you would pay zero tax on the first £125,000, 2% tax on the £124,999 that falls into the second bracket with the remainder (£100,000) being charged at 5%. The total stamp duty would therefore be £7,500.

First time buyers do not pay SDLT if the property they are purchasing is £300,000 or less.

SDLT is payable within 30 days of completion of contracts and is usually handled by your conveyancing solicitor.

Capital Gains Tax

You may have to pay Capital Gains Tax (CGT) on the sale of a property which isn’t your primary residence, for instance a buy-to-let home, inherited property or business premises.

The rate of CGT is dependent on your tax-free allowances but is currently 18% on any profits which fall within the basic Income Tax band and 28% on any amount above this band.

Removal Fees

Most property purchases (and sales) will necessitate some kind of removal fees. Whether you simply hire a large van yourself and bribe a few friends and family who can help you move your belongings or pay for a full packing and removal service there is a cost involved.

Professional removals companies can charge from £500-£1500 for their services and usually include full insurance for any damage, both to the old and new property as well as your belongings.

Van hire can cost a lot less and you might be able to hire a small van for just £50-£150.

Legal Fees

When purchasing (and selling) a property, you must appoint a conveyancing solilctor to act on your behalf. Your representative handles the contract paperwork and the transaction process upon completion of the sale.

house buying fees land registry

A convenyancing solicitor handles all the legal side of your house sale and purchase including lodging change of title deeds with the Land Registry. Image via Wikimedia.

There are two types of fees that are payable to a conveyancing solicitor; direct legal fees and disbursements. The former are charges levied by your representative for work undertaken and are often calculated on a fixed fee basis although some do charge hourly. The latter are fees that are payable to third parties and include:

  • Obtaining Title Deeds – £6 (freehold) or £25 (leasehold). Additional copies £3
  • Land registry ownership transfer fees – approximate cost £200-300
  • Searches (local, drainage and environmental) – approximate cost £250-300
  • Transfer fees – charged to electronically transfer funds from your lender to the vendors solicitors. Typically, around £40-50.

These charges are common to all conveyancers, but the direct legal fees vary depending on who you instruct to act on your behalf. However, you should factor a cost of between £300 and £1500 depending on whether you are buying or selling only or both; the figure will depend on the nature of the sale and whether there are any complicating factors such as foreign currency, unregistered land etc.

As with an IFA, mortgage lender and removals company, it is best to get a few quotes to ensure that you get the best conveyancing deal.

Survey Costs

Your mortgage company may stipulate the minimum level of survey required in order to release funding for your new property with a valuation survey costing anywhere from £150-£1500 (see Arranging a Mortgage, above).

However, even in the absence of a mandatory need for a survey, all homeowners are recommended to obtain a survey that is appropriate to the age and type of property they are buying. There are three main options:

  • A RICS Homebuyer Report which costs around £400 and is a basic inspection or £250 for new build (known as a condition report). This kind of report is normally recommended for buildings under 10 years old.
  • A Home Condition Survey which offers a more detailed inspection of a property and identifies defects along with possible solutions. You should expect to pay around £500 for a survey of this nature. This level of survey is suitable for properties under 50 years old and which are a traditional design and build.
  • A full structural survey that is more extensive in its detail. Best used for buildings over the age of 50 years old or that have been designed and built outside of the ‘norm’, a survey of this nature can cost at least £600 but for more complex properties may be over £1000.
building survey fees guide to house moving

Building surveys vary in cost but you should always opt for one that is right for your home not just your budget. Image via Wikimedia.

Other Fees

Depending on the type of property you are buying, the mortgage you arrange or the circumstances, there may well be additional costs to factor in, including:

  • Insurance – Some properties may require specialist insurance policies, particularly those that are at risk or have been subject to subsidence, flooding or other issues. Some insurance companies may insist on a survey of things like drains, trees or foundations prior to issuing cover.
  • Indemnities – if you sell your house without the relevant certification for matters like double glazing, electrical works or building certification then your buyer may wish to take out a policy to insure themselves, the cost of which is usually charged to the seller.
  • Leasehold fees – if you are purchasing a leasehold property then you may have to pay your annual ground rents and other service charges up front. Your estate agent should be able to advise you of these costs.
  • Post Redirection – don’t forget to have your mail redirect from your old address to your new.
  • Cleaning fees – if you are selling a home or leaving a tenanted property then you will need to ensure that the house is clean upon handover. Whilst you may want to save money to do this yourself, it can be easier and less stressful to have someone else do this for you. A professional company can clean carpets, kitchen appliances and windows etc for less than you might think. It might be worth considering if you are relying on a landlord returning your deposit for you.
  • Storage costs – not all moves are to upsize with some families, couples and individuals downsizing their property. If you are doing this and haven’t completed the process of depleting your belongings then you might need to pay for storage until you unpack the majority of your stuff.
  • Kennels – if you have pets then packing, moving and unpacking can be a stressful time. You may have to rely on family and friends to look after animals such as cats, dogs or small caged furries. If you don’t have access to this kind of support then you may need to budget for boarding facilities until your new home is ready to welcome your four-legged friends.

Moving home can be an expensive and challenging experience and is regularly ranked as one of the most stressful life events you can encounter. Here at Property Assistant, we want to make the process of buying and selling a home as stress-free as possible. We go the extra mile to make sure our customers achieve the best price for their home so they can afford to make their budget go further on moving day.

If you would like to know more about how we can help you maximise the market value of your property and secure the best price for your new home then contact us today on 0118 912 3270.

Don’t forget, you can also download our free copy of the Home Buyer’s Guide for simply registering for our newsletter.

Featured image via Public Domain Pictures.