Moving House Costs: The Extras Involved
There are a number of moving house costs that need to be included within a prospective buyer’s calculations.
Mortgage Arrangement Fee
This is the fee your lender will charge you for processing the mortgage product. There is a huge variation in cost across UK lenders from zero to as high as £2,000. Fee-free mortgages are available but usually have higher interest rates to compensate. This is always non-refundable and in some cases this even includes situations where the house purchase falls through. Some lenders also charge a separate reservation fee to provide a fixed-rate. Again, non-refundable, this usually costs £100 – £200.
It is also worth remembering that if you choose a mortgage product for a specific period (e.g. 3 year fixed), and wish to change this afterwards, you will pay another application fee.
Survey / Valuation Fee
All lenders require a survey on the property in question and there are three standard types of survey available. A Valuation Report verifies that the property exists and that it offers the lender enough security for the loan. This type of survey is really for the lender’s benefit. The second type is the Homebuyer’s Report, which is suitable for standard properties that are less than 50 years old. A Full Structural Survey is the most detailed survey available and is suitable for older or more unique properties. Only one of these survey reports is required by the lender.
The cost of the survey depends on the property value as well as the type of survey done. A Valuation Report will cost c. £200, while a Homebuyer’s Report will typically cost £250 and a Full Structural Survey around £700.
It is also possible to get an electrical inspection done of the properties wiring. This costs approximately £100.
Legal / Conveyance Fees
Solicitors are responsible for checking for any issues with the property relating to such things as subsidence, drainage and flooding. They will also confirm the property boundaries and check for costs associated with the property such as ground rent and maintenance. The solicitor will also conduct local authority searches, which will uncover any approved planning applications. Additionally they will register the change of ownership with the Land Registry. Costs vary widely depending on the solicitor used, but will generally lie between £500- £1,500. Some lenders will arrange to pay legal fees as part of a mortgage deal and the conveyance will be conducted through a solicitor they have selected.
Stamp Duty
This is a land tax owing to the government and due on any property purchases over £125,000. The amount owing rises with the value of the property, as follows:
- Up to £125,000 0%
- £125,001 – £250,000 1%*
- £250,001 – £500,000 3%
- £500,001 – £1,000,000 4%
- £1,000,001 + 5%
The stamp duty percentage is applied to the full property value e.g. a property valued at £600,000 would mean stamp duty of £24,000 (4% of £600,000).
Moving House Costs: Removal Services
You will need to move your belongings to the new property and the costs of this will vary, depending on the distance, number and value of belongings. However, the cost of removals can be reduced by booking in advance (c. 8 – 12 weeks) and by avoiding peak times, such as on Fridays, public holidays or at the end of the month. All these and more can together reduce the impact of your moving house costs. All these feed into the methods and preparation behind buying a house, with related tips to be found here.
