House prices have risen for the first time in six months, and this could be an incentive for those who want to sell their home.
Prices rose by 1.1% last month, said the BBC, citing the latest data from the UK's largest mortgage lender, Halifax. However, over the next year experts believe values will fall.
As a result, people may want to act sooner rather than later when it comes to moving home. But they will also need to consider paying out for lots of other up-front costs too.
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It now takes an average of 60 days to sell a house, according to the Home Owners Alliance, so it is worth being aware of the costs involved to be ready for a move in the new year.
The cost of moving home "can be surprising" to buyers, said Reallymoving.com, rising to more than £14,000 on average last year.
The Week takes a look at what those costs involve.
Deposit
The average UK house price is £281,974, according to the latest Halifax House Price Index.
To get a mortgage, you'll need a deposit to bridge the gap between the amount that your mortgage provider is willing to lend and the value of the property. "Generally, the bigger the deposit you can pay, the more likely you are to be given a mortgage (subject to an affordability assessment), and the lower your interest rate is likely to be," said Money Helper.
On average, the required deposit will be at least 5% to 20% of the purchase price. A 20% deposit on a £250,000 home, for example, would cost £50,000.
Mortgage fees
Buyers should be aware of several different fees involved in getting a mortgage, "including the arrangement, valuation, broker costs and interest", said The Money Edit.
Along with monthly repayments, there may also be a booking fee of between £99 and £250, an arrangement fee of up to £2,000 and a mortgage valuation fee of at least £150.
"You can usually pay these upfront or add them to your mortgage," added the site, "but if you do this you'll also pay interest on the repayments."
Watch out for low mortgage rates, said MoneySavingExpert, as some "cunning lenders" use high fees of £2,000 or more to make their pricing look more attractive and rise up the best buy tables.
Stamp duty
Stamp duty is a tiered tax on land and property transactions, but "not everyone has to pay it", Which? said.
The tax puts millions off moving, said the Mail on Sunday, which reported Hargreaves Lansdown research showing 13% of older homeowners "blamed the cost of stamp duty" for stopping them from downsizing.
Reforms introduced last year mean that first-time buyers do not pay any stamp duty on the first £425,000 of a property's value. The previous threshold was £300,000.
Existing homeowners buying a new property to live in pay no stamp duty on the first £250,000; 5% on the amount between £250,001 to £925,000; 10% between £925,001 and £1.5 million; and 12% on the remaining amount above £1.5 million.
Landlords and second homeowners have to pay an extra 3% when buying a property that they do not plan to live in.
For a £281,974 property, a first-time buyer would pay no stamp duty, while someone moving to their next home would pay £1,598. A landlord buying an additional property to rent out would pay £10,057, according to the Money Helper stamp duty calculator.
Legal fees
You'll need to pay a solicitor to oversee all the legal work associated with buying a home.
This includes conveyancing, paperwork, checking environmental factors, planning permission, or "other hidden nasties" which could cause issues, said MoneySavingExpert.
Some lenders may cover these fees, "but only if you use one of their chosen solicitors", the site added. Otherwise, expect to pay between £800 and £1,500, depending on the purchase value.
It is vital not to underestimate legal fees as not all property purchases are straightforward. Complex issues left unresolved by previous owners could take lawyers time to sort out.
Surveys
A house survey is a detailed inspection of the condition of a property you want to buy. "It will tell you if the property is worth the price you have agreed to pay for it and whether you face any major repair bills," said the HomeOwners Alliance.
The cost depends on the type of survey chosen and the value of the property.
For example, if the property is worth £200,000 and you want the most basic RICS Home Survey Level 1 – a report identifying visible defects and areas that need investigation – it could cost around £400.
A full level 3 structural survey – a thorough investigation of the property and estimates of the cost of repairs – usually costs £500 or more. On a £1 million home, the cost could be upwards of £1,500.
Estate agent fees
If you sell your home through an estate agent, you will need to pay a commission or a fee for their services. This covers listing your home, taking pictures, arranging viewings, helping with negotiations and seeing the deal through to completion.
Most estate agents charge you a percentage of the sale price of your home, which you pay once you've sold. "A good ballpark figure for a sole agency contract, which is when just one estate agency markets your home, is between 1% and 2% of your sale price," said Zoopla. But you could have to pay up to 3.5%, "especially if you want a service with all the bells and whistles".
Removals
Once your property purchase completes, you need to arrange to get your belongings from your current home to your new one.
If you go for a professional removal firm "rather than renting a van and doing it yourself", said The Times Money Mentor, then your removal costs will depend on the distance travelled, the volume of items, the location, and the services you require such as packing, storage and rebuilding.
According to CompareMyMove, the average removal company costs for a three-bedroom house and travelling 50 miles total £806, rising to £1,181 with packing and furniture dismantling services included.
Check if your removal company has insurance covering your items during the move. Your home insurance policy may provide cover too.
Some days and months may be cheaper to move than others.
Rob Houghton, CEO of Reallymoving.com, said: 'It's not always possible to choose your moving date, especially if you're in a chain, but moving mid-week and during quieter periods of the year can help bring costs down."
It pays to "set aside" extra money for any "unforeseen moving costs", said Zoopla. The property website's research found 44% of buyers were hit by "unexpected charges" of more than £500, while 30% overspent by more than £1,000. This was attributed to extra surveying and conveyancing charges.
Extra potential costs also include cleaning your old home or your new one. When moving from a rental property, your contract may require that you pay for a professional house cleaning service when you leave.
The average full house cleaning service cost is £14.50 per hour, according to Checkatrade, "and you're looking at an average deep cleaning time of six hours for a one-off clean".
You may also need to budget for extra childcare, or kennels for a pet, while you move and unpack, and for takeaways for a day or two if you don't have time to cook. "These costs can all add up so make sure you include them in your budget," said Money Helper.
Marc Shoffman is an award-winning freelance journalist, specialising in business, property and personal finance. He has a master’s degree in financial journalism from City University and has previously written for FTAdviser, ThisIsMoney, The Mail on Sunday and MoneyWeek. This article is based on information first published on The Week's sister site, The Money Edit.
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