13 Home Moving Costs to Consider on Top of the Mortgage

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by: MarkeD
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Date: Wed, 24 Mar 2010 Time: 4:05 AM
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Now that the property market seems to be emerging from its slump, here's some information on the costs involved in a home move. The good news is that you'll be able to nab that home you've got your eye on for considerably less than it would have cost a few years back. The bad news is, if you think a mortgage is your only major expense - think again.

So to avoid a nasty shock when it comes time to move, here's an outline of the other major costs involved in moving home.

1. Legal Fees - You need to hire a solicitor or licensed conveyancer to deal with all the legal red tape associated with the move - searches, transfer of ownership/funds etc. Legal fees typically cost anything between £500 and £1,000. Ask around for a good, word-of-mouth referral, or check out these solicitor and licensed conveyancer databases, and then ring around for quotes.

2. HIPs (Home Information Packs) - HIPs first appeared in August 2007 with the intention of making the buying and selling process faster, simpler and easier to understand. They contain essential information about the property, including: an energy performance certificate; sale statement; standard searches; evidence of title; and additional information if the property is leasehold. If you're about to move into your first home then you don't need to buy a HIP as it's the seller's duty to provide one to potential buyers, but if you're selling a home, then you'll need to factor in this cost (typically between £200-£350).

3. Stamp Duty - Most homebuyers have to pay Stamp Duty Land Tax (SDLT) on home or land purchases over a certain value. SDLT is charged at different rates according to the price of the home or land. Currently the rates are:

Residential Property Purchase Price

Stamp Duty %

£0 - £125,000
0%

£125,001 - £250,000
1%

£250,001 - £500,000
3%

£500,001 or more
4%

Exceptions: you may be exempt from SDLT if your new home costs less than £150,000 and is situated in a government designated disadvantaged area; zero-carbon homes costing under £500,000 are SDLT exempt, and homes bought for £500,000 or above will have stamp duty reduced by £15,000.

Considering that the average UK house price is now £169,777 (source: Halifax House Price Index January 2010), the average stamp duty will be around £1,700 - quite a hefty addition to the price of a new home. However, it is often possible to add this cost to your mortgage - though be aware that you will pay much more over the long term due to the interest accrued.

4. Valuation/Survey - Before being approved a mortgage, your lender will insist that a valuation is carried out on the property you're after to make sure it's worth the asking price, and therefore a relatively sound investment. As valuations are the most basic (i.e. cheapest) type of survey, you may want to consider opting for a more thorough one. These are costlier, but provide more insight into any problems a home may have or may soon develop. The three types of survey are:

• Valuation/Basic Survey - As the main purpose is to offer a simple valuation, this type of survey is the least thorough and could miss potential problems. The buyer usually pays (anything between £100 and £300), though some mortgage deals will cover this as an incentive for you to take their product.
• Homebuyers Report - More thorough than a basic valuation, this provides a more detailed report on the state of the property and can cost the buyer up to £500. However, there are no guarantees that all problems will be uncovered.
• Building Survey (Full Structural Survey) - This is your most comprehensive option and can cost you up to £1,000. Full surveys are usually for older or unusual properties.

5. Buildings Insurance - This will be required as a mortgage condition, and should be in place from the date of exchange of your new home. However, you are not obliged to buy the mortgage provider's recommendation, and are free to shop around for a more competitive buildings insurance quote.

6. Contents Insurance - You'll want to make sure that all your contents - old and new - are covered at your new address.

7. Life Insurance - This may also be required as a mortgage condition, but again you are not obliged to buy the mortgage provider's recommendation, so make sure you shop around for a great life insurance deal.

8. Estate Agent Fees - This isn't a compulsory expense as you don't have to use an estate agent - you could opt instead for your own local press or online (try Rightmove or Primelocation.com) adverts. However, if you do want to catch local ‘window shoppers', estate agents will advertise your property in their storefront, online and in print, as well as escort viewers around your home. For this service they will charge a percentage fee of the selling price - usually between 1% and 2%. If you register with more than one estate agency, commission can rise to as much as 3.5%.

9. Removal Firm/Van Hire - The budget option here is to do the removals yourself, in which case all you need to cover is van hire (typically between £100-£150 for a weekend) and fuel costs. If you're not up to all that lugging around, you can call a removal firm, though they cost a lot more - around £500-£2,000 depending on the size of the home and the relocation distance. The British Association of Removers or the National Guild of Removers and Storers (NGRS) are good places to find a reputable firm in your area. Remember to check that the removal firm will adequately cover your property for any damage in transit. Your home insurance policy may also offer some protection for your property during a home move, so check the policy details.

10. Utilities - To avoid moving into a cold, dark home, make sure that the gas and electricity is connected before you move in. The seller will probably have informed the utilities companies of a change of ownership, but you're not in any way obliged to stay with the same providers. To find the best deal for your new address, go online and search for cheap gas and electricity. And don't forget to take meter readings as soon as you move in.

11. Broadband/Digital - You'll want to be wired to the world as soon as possible from the date you move in, so before leaving your old home, do an online search to find cheap TV, broadband and phone deals for your new address. Note that you may have to pay a telephone reconnection fee if the line was previously disconnected (BT currently charge £124.99).

12. Leasehold - If your new home is a leasehold property, you will have to pay ground rent and service charges to a landlord. Ground rent is usually a nominal annual payment, but annual service charges - covering such things as management costs, buildings insurance and some repairs - can run into the thousands (the cost would have been made known to you prior to the purchase).

13. Council Tax - This tax pays for your rubbish collection, policing and other municipal costs. It's divided into eight bands - A (the cheapest) to H (the most expensive), depending on the size of your home. Your council tax bill will probably increase if moving to a larger home or more expensive council. The bad news is the average annual bill in 2009 hit £1,400.

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