How much does it cost to buy a house and move?
Buying a house and moving involves a variety of expenses that go beyond the initial cost of buying the home. Whether you are buying a home for the first time or already own one, it is important to understand these costs. This knowledge will help you manage your budget and avoid any unexpected expenses.
This guide provides a detailed breakdown of the key expenses involved in buying a house and moving.
- Property Purchase Price
The main cost people focus on when buying a house is the purchase price. This cost varies considerably depending on the location, size, and the condition of the property.
Property prices in London and other big cities are usually higher than in rural or less populated areas. Knowing your budget and looking at properties you can afford will make buying a home easier.
The cost of the property is important. However, it is not the only expense to consider when viewing potential houses.
- Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax is a significant cost when purchasing a property. You must pay SDLT if the property you are buying exceeds a certain price and is located in England or Northern Ireland. If you are buying property in Scotland you would pay Land and Buildings Transaction Tax or in Wales a Land Transaction Tax.
The amount of SDLT you pay depends on the type of property. It can be residential, non-residential, or mixed-use.
Your situation might have special rules that change how much you owe. For example first-time buyers do not pay stamp duty on homes that cost up to £300,000 and 5% on the portion of the cost from £300,001 to £500,000. However, if the home costs more than £500,000, then you will need to pay the same amount of SDLT as someone who is not a first time buyer.
Stamp Duty rates on residential properties are as follows:
| Property Price | Main Residence | Additional Property |
|---|---|---|
| Up to £125,000 (£300,000 for first-time buyers) | 0% | 5% |
| £125,000 – £250,000 | 2% | 7% |
| £250,001 – £925,000 | 5% | 10% |
| £925,001 – £1.5 million | 10% | 15% |
| Remaining amount above £1.5 million | 12% | 17% |
- Legal Fees
Legal fees, also called conveyancing fees, pay for the work completed by your Licensed Conveyancer or conveyancing solicitor. They handle the legal parts of buying or selling a property. These fees typically range from £500 to £1,500 plus VAT and disbursements but will vary based on the complexity of the purchase.
It is worth noting that some of these fees, for example for the property searches, need to be paid upfront. Typically you would receive the invoice for the rest of the conveyancing work around the point of exchange to be paid before completion.
Obtaining a detailed quote before committing is advisable to ensure transparency and avoid unexpected charges.
Find out how much your conveyancing will cost:
- Survey Costs
Conducting a property survey is crucial to identify any potential issues with the property before completing the purchase. The property value and the type of survey you choose will affect the cost:
RICS Home Survey Level 1 (previously known as a RICS Condition Report): £300 – £900, suitable for new homes and standard properties.
RICS Home Survey Level 2 (previously known as a Homebuyer survey): £400 – £1000, suitable for standard properties that are in a decent condition.
RICS Home Survey Level 3 (full structural survey): £630 – £1,500, recommended for properties that are 50+ years in age and those that are in a poorer condition.
The Residential Property Surveyors Association (RPSA) offers another option: a Home Condition Survey. This is similar to the RICS level 2 survey and usually costs around £400 – £900.
- Mortgage Fees
If you’re securing a mortgage, you’ll need to factor in several additional costs:
Lenders typically charge arrangement fees of around £1,000 for setting up the mortgage although these can usually be added to the loan.
Valuation Fees: Usually between £200 and £500, these cover the cost of assessing the property’s value.
Broker Fees: If you hire a mortgage broker, they might charge a fee. This fee varies but it is typically between £300 and £500. It may be that your lender will settle the broker’s fee for introducing your business to them.
- Removal Costs
Moving costs depend on the distance of the move, the volume of your belongings and level of moving service needed. Local moves that you pack yourself typically cost between £400 and £900. If using a packing service you could be looking at costs from £800 – £1,800+. Long-distance moves or moves from larger homes can be much more expensive.
Getting quotes from several removal companies is beneficial to ensure you get the best deal.
- Insurance
Insurance is an essential aspect of protecting your new home and belongings:
Mortgage lenders often require building insurance before they approve your mortgage. It protects against damage to the property’s structure. You must have this in place before you can exchange on a property.
Contents Insurance: Although not mandatory, it’s highly recommended to protect your personal possessions against loss or damage.
These costs vary depending on the property and belongings that need insurance. Shopping around to ensure you get the right coverage for the best price is a good idea.
- Utilities and Council Tax
Once you have moved into your new home, you’ll need to arrange for utilities such as electricity, gas, and water. You will also need to pay council tax, which depends on your property’s value and the rates set by the local council. Contact utility companies and your local council early to set up your accounts and decide on your payment methods.
- Additional Costs
Other expenses may arise that are worth keeping in mind and planning for:
Property Maintenance: Budget for routine maintenance and unexpected repairs.
Decorating and Renovations: If you plan to make any changes to the property, factor in the cost of any potential work.
Moving-in Costs: These could include new furniture, fittings, or appliances if they haven’t been included in the sale.
Buying a house and moving involves more considerations than just the property’s purchase price. By budgeting for stamp duty, legal fees, surveys, mortgage costs, removal expenses, insurance, utilities, and potential additional costs, you can be better prepared for the financial aspects of the home buying process.
Understanding these costs will help make your move to a new home easier. It will also lower the chance of unexpected financial problems.
