Planning a move?

Make sure you count the costs

House/flat sold sign

The stamp duty holiday is providing a major boost for homebuyers but remember that there are plenty of other costs to consider if you’re planning a move.
There is currently no stamp duty to pay if you’re purchasing a property in England or Northern Ireland costing up to £500,000. Normally stamp duty is payable on any property costing £125,000 or more, or £300,000 if you’re a first-time buyer. In Scotland stamp duty is known as Land and Buildings Transaction Tax (LBTT) and in Wales the Land Transaction Tax. Starting thresholds for these taxes have risen to £250,000 temporarily, up from £145,000 and £180,000 in Scotland and Wales respectively.

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The stamp duty holiday will finish at the end of March next year and has prompted a flurry of activity from home movers wanting to take advantage of savings up to £15,000. However, even if you escape paying stamp duty, moving costs can still run into thousands of pounds. Here’s a rundown of some of the expenses you’ll need to factor in.

Conveyancing costs
You’ll need a solicitor to arrange the legal transfer of the property you’re buying to your name, and to sort out the sale of your existing home if you own one. According to the Money Advice Service, legal fees typically range from £850-£1,500 including Value Added Tax at 20%, but you’ll have to pay for local searches which cost around £300.

Mortgage arrangement fees
Many people ‘port’ their existing mortgage to their new home when they move, but if you need to arrange additional borrowing, or have to take out a new mortgage, there may be mortgage arrangement fees to pay. These can either be a percentage of the property price, or a flat charge which is typically around £1,000. You may be able to add this to your mortgage, but doing this will mean you have to pay interest on it.

Removal fees
Unless you plan to hire a van and move yourself, you’ll need to pay a removal company to transport your furniture and possessions to your new property. Removal costs can vary widely depending, so it’s a good idea to get several different quotes before choosing which company to use. Removals comparison site Comparemymove.com says that the typical cost to move the contents of a 3-bed house 50 miles away is roughly £1,181.

Estate agency fees
If you have a property you need to sell before you can move, you’ll usually have to pay estate agent fees for them to market your home. Average estate agency fees range from around 0.75% of the property price to 3% depending on the contract and agent you choose.

Other costs
Extra costs set the typical home mover back almost £700 according to comparison site MoneySuperMarket. It says the five most common additional costs incurred when moving home are new household items such as bedding and kitchen utensils, new furniture, paying for post to be re-directed, paying for the installation of WIFI, and changing bill providers.

A word of warning…
If you’re considering moving now so you can benefit from the stamp duty holiday, remember that house prices in many areas are currently at record highs, so be careful not to get carried away and spend more than you’d planned to. High prices could be short-lived as the number of job losses due to coronavirus rises, and the stamp duty holiday finishes.

A spokesman for the Centre for Economics and Business Research said: “Our analysis suggests that prices will start to fall significantly towards the end of the year and the first half of 2021 (though there might be a short spike as the stamp duty reduction comes to an end), with average house prices forecast to be 13.8% lower in 2021 than in 2020.”

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