Moving home is said to be one of the most stressful experiences anyone can go through, but it can also be one of the most expensive. And we're not just talking about the cost of the house (and mortgage) itself – what about the additional costs associated with moving home? They can soon add up, and unfortunately, it looks as though they're on the rise.
According to research from Post Office Money, the cost of moving home has increased by almost 60% in the last decade, compared with a 29.4% rise in the cost of living. It means typical moving costs stood at £11,894 at the end of 2014 – up from £7,475 in 2004 – creating yet another challenge for those hoping to get on, or move up, the property ladder.
Stamp duty fees have increased the most, rising by an average of 87% since 2004, meaning the typical homebuyer paid £3,620 on stamp duty alone last year. Hopefully this will decrease in the coming years following the stamp duty reforms, but as it stands, it accounts for 30% of total moving costs. However, estate agency fees are still the biggest culprit – these now account for 44% of the total (£5,214), with the cost having increased by 61% in the last 10 years.
Surveyor fees take up the smallest proportion of additional costs, with typical fees standing at £607 (5% of the total), but it still marks an increase of 51% since 2004. Meanwhile, conveyancing fees (coming in at £1,419) have increased by 37% in the last decade and now account for 12% of moving costs, while removal costs (£1,034, or 9% of the total) have risen by 21% over the same period.
Despite the cost of moving increasing, the vast majority (84%) of prospective homebuyers are still underestimating the amount they'll need to set aside in order to cover these additional costs. Those hoping to buy in the next three years expect to spend just £6,895 on moving costs – just over half (58%) of what they should actually be budgeting.
This drastic underestimation means that many homebuyers could find it a shock when the time comes, and finding an additional £5,000 could be difficult during an already expensive time. Indeed, these costs are on top of the £90,889 the average buyer needs to find for a deposit (£48,959 for a first-time buyer), which is why it's so important to be prepared.
John Willcock, head of mortgages at Post Office Money, commented: "With prospective homebuyers' attention firmly fixed on saving for a deposit, the additional costs of moving can often come as an afterthought – particularly for first-time buyers who are taking their first steps on the property ladder.
"Although house prices may continue to rise, there are steps buyers and movers can take to reduce the amount they pay on top of this. Planning ahead is essential and potential homebuyers should be setting aside savings specifically for these costs. These 'add-ons' should be considered as part of the overall cost of buying or moving home."
The only way to be sure that you won't get a bigger-than-expected bill is to plan ahead. Carefully budget for these costs in your overall plan – and make sure you don't underestimate them – so you won't get a shock when the time comes, and factor this amount into your savings goal.
Then, get saving! Having a dedicated savings account for this very reason would be ideal, perhaps an easy access account so you can add to it on a regular basis, or even a regular savings account to get into the habit. Knowing you've got the money there to cover those extra costs could leave you with one less thing to worry about, so make sure you're prepared and hopefully you won't get such a shock.
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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