We all know that moving home can be an expensive business, and unfortunately, the costs involved are rising at a rapid pace – which means many could delay moving for much longer than they'd initially planned.
Research from Lloyds Bank shows that the average cost of moving home in the UK has increased by £870 year-on-year, standing at £10,996 at the end of June – a significant sum, particularly after you've already had to part with the deposit.
Not only that, but this marks an annual increase of 9%, well above the 0.5% rise in inflation recorded in June and the annual growth in average earnings of 1.5%. It also means that the cost of moving has increased by £2,206 (or 25%) in the past 10 years, rising from £8,790 in 2006, again far higher than the average rise in full-time earnings of 17% over the same period.
… and rising house prices
Perhaps unsurprisingly, rising house prices have been the main driver of these increased costs. Prices have been increasing so rapidly in recent years that they've have a marked effect on everything linked to them, and have pushed up estate agency, stamp duty and conveyancing fees in the process.
Indeed, higher estate agency fees account for more than half of the increase in average moving costs, having risen by £402 (or 8%) in the last year to total a whopping £5,404. Average stamp duty costs have increased by the highest amount, however, rising by 17% year-on-year (or £372) to £2,504, while legal costs are up by £93 (8%) to an average of £1,251.
Mike Songer, mortgage director at Lloyds Bank, said that "the cost of stepping up the housing ladder has continued to rise sharply over the past year", a trend which is "especially marked for buyers in London and the South East, with the combination of both higher property prices and more rapid increase in prices in recent years resulting in significantly higher moving costs in these parts of the country".
The figures highlight these geographical variations. For example, the average moving cost inLondon stands at £31,416 – nearly three times the UK average – after rising by £4,732 (18%) in the last year, while in the South East the average outlay stands at £20,210, equating to a rise of £3,382 (20%). Conversely, Northern Ireland has the lowest moving costs, standing at an average of just £5,401, with the region's far lower house prices being a key reason for that.
Find the right mortgage to suit
Given that moving costs are rising so rapidly, it's more important than ever to be prepared. This means making sure you've got a suitable savings pot to cover the extra cost, but it could also pay to be a bit savvy with your mortgage choice.
A growing number of mortgages are offering added incentives with their deals – with mortgage rates so low, many providers are looking for other ways to compete – so make sure to take a closer look before you make your decision. Be on the lookout for things like free legal fees which can drastically cut your upfront costs, as well as free valuation. Having a fee-free mortgage can be particularly beneficial, too.
There's also the possibility to add the extra costs onto the advance of your mortgage, but remember that this will add to your debt and mean you've got more to pay off. It'll also mean you'll be charged interest on those moving costs – which could result in you paying far more in the long run – so it could make sense to opt for other means.
A combination of the right savings account and mortgage deal could ensure you're able to cover those moving costs with ease, so get searching!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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