Moving house has always been recognised as being stressful and expensive but as property values continue to rise, the associated costs of moving in the UK are also now becoming increasingly expensive.
As reported in The Telegraph in September 2016, the costs of the average house move is now around £31,000, an increase of around 14% on 2015.
Given that fees for estate agency, conveyancing, survey and mortgage services, as well as statutory Stamp Duty Tax, are all pro-rata in relation to selling / purchase price, it makes sense then to realise that the fees associated with moving home in London, with its significantly higher property values, have become more expensive. In fact, costs in London have risen by around 18%, compared to rises of just 10% in East Anglia, 9% in the North East and 4% in the West Midlands. The rise in the London area, which puts the cost of an average house move at approximately £31,416, is typical of the higher costs associated with moving generally in the South East, which have risen overall by a massive 20% in the last year.
Of all costs, the relatively higher (and continually rising) property values in London can mean that the stamp duty tax is particularly significant and can even add an extra £22,000 to the purchase price of an average London home. Particularly for those moving to increase the size of their family accommodation, the move from an average 3 bedroom family home, to a larger family home of 4 bedrooms, can easily push the buyer into the higher levels of the stamp duty tax bracket:
|Property price||Stamp duty|
|£0 – £125 k||0%|
|£125 k – £250 k||2%|
|£250 k – £925 k||5%|
|£925 k – £1.5 m||10%|
|over £1.5 m||12%|
To help calculate the costs payable for property transactions in the UK, HM Revenue and Customs offer a dedicated Stamp Duty Land Tax calculator. However, this doesn’t make the actual costs any easier to bear, particularly in the context of the increased costs that London prices add to those other home-moving expenses:
- Mortgage money – arrangement and booking fees vary depending on the provider, but can easily add up to £3,000 to moving costs.
- Valuation fee – if a mortgage is required for a new purchase, then the mortgage provider will certainly have their own fees payable. At the very least, a valuation fee, again based on the property’s value will be necessary and with London prices, this can easily cost from £500 to several thousand pounds. This valuation is to protect the lender’s money, rather than to check the full condition of the property. For a thorough check on the property’s condition, a survey may be additionally required, which can cost upwards of £250 for a basic Homebuyer’s Survey and a minimum of £600 for a full structural survey.
- Legal fees – also known as conveyancing fees, legal fees can be negotiated if you have a sale and purchase running concurrently with the same solicitor, but can still run from several hundred to several thousand pounds – and are also subject to 20% VAT. These costs do not include either the search fees, an additional fee of around £300, or the costs for electronic transfer, the handling of funds associated with any sale / purchase, for which fees of up to £100 may be charged.
- Estate agents fees – if you’re looking to gain space by selling your too-small home by using the services of an estate agent, then fees of anything from 0.75% to 3% of your agreed selling price, plus VAT, will be payable. It’s possible to reduce costs by negotiating with the agents, particularly if you are using the same agent to both sell and buy, or by using online estate agent services or marketing your home privately. However, a significant amount of time, rather than money, may be required to do this effectively.
- Removal costs – as fuel prices as well as average property prices, have risen since last year, removal costs too are increasing. The costs of professional removals may start at around £400 for a smaller family home (2 beds) to a larger one, but the cost of moving from a 3 bedroom average home is likely to be well over £600. For moves in and around London, there are also congestion charges and parking fees to consider, as these will also need to be accounted for in removal costs.
- Hidden extras – a major hidden cost of moving in London to increase accommodation size comes from council tax, as a move to a bigger property almost always means moving up a council tax bracket.
Adding on value, not costs
Instead of facing the costs, as well as the hassle, of moving in London, a loft conversion can present the ideal alternative when home size needs to increase but costs need to be kept low. Having an attic conversion to create additional accommodation can provide:
- Up to 20% more space in an average home. More may also be possible, subject to relevant planning consents (just ask Abbey Lofts for further information).
- Various accommodation solutions including extra bedrooms, bathrooms and living space.
- Cost effectiveness in comparison to the costs of buying and selling generally, but in London particularly. Additionally, even though the property’s accommodation may increase, in most but not all cases, unless a query is raised or a similar property in the area has its council tax band changed, council tax is not usually recalculated until the next time a property is sold: so any increase in council tax in relation to your newly extended property is less likely to become payable during your ownership.
- Additional value to the home, in the event of selling in the future.
Finally, although a loft conversion cannot provide that all-important additional outside space or garden which some families may be looking for in a proposed upsize, if access to the outdoors and fresh air rather than a garden is a suitable compromise, then a loft conversion can also make this possible. Just ask your loft specialist about incorporating features such as a balcony window or Juliet balcony as a way of bringing the outdoors in, for what could easily be much less money than moving to increase outdoor, as well as indoor space in London.