10 Hidden Costs When Moving Home
The costs of buying a new home can add up when you don’t know what to expect. There is the obvious cost of the new house but what about the legal fees? What about the Stamp Duty? And, the most overlooked cost of all, what about the moving fees?
Here’s a list of the top 10 most commonly overlooked costs when moving home:
- Stamp Duty
Stamp Duty Land Tax is payable in the UK on the purchase of most property. The cost will vary depending on the value of a property as well as your current situation in terms of how many properties you already own.
If you are buying a house worth over £125,000 you will have to pay Stamp Duty Land Tax (SDLT). Your solicitor is likely to deal with the paperwork but you should understand what you need to pay.
No stamp duty is paid on the first £125,000 on the purchase price of the property, but there is a scale of fees for the remaining purchase value over £125,000. The subsequent rates vary between 2% and 12% (as at 2019).
If you are buying your first home the rates are different. You can claim a relief discount so you do not pay any SDLT up to £300,000 (the amount is slightly higher in London) and pay 5% on the portion from £300,001 to £500,000. Eligibility rules apply.
To calculate your exact SDLT liability you can use the Government’s website tool at: https://www.gov.uk/stamp-duty-land-tax
- Legal fees
Conveyancing fees will apply to every property purchase in the UK. There are legal steps to follow including, transferring property title deeds, finalising a mortgage and may include extra legal work such as first-time buyer ISAs, shared ownership properties, leasehold properties and the use of new build equity loans. The fees vary depending on your chosen conveyancer and specific requirements but can start from around £780.
Garnett Wilson are expert conveyancers for property purchases in England and Wales. You can see full fee information at www.garnettwilson.co.uk
- Buildings insurance
Before qualifying for a mortgage, it may be necessary for you to obtain buildings insurance. Many insurance companies require it, but the cost shouldn’t break your bank with a charge from around £100 a year.
- Money transfer fee
With today’s technology we are used to quick and easy money transfers but with large amounts sometimes this is not possible.
Your solicitor should take responsibility for transferring the necessary funds but it may require a CHAPS payment, which means same-day transfer of funds, costing around £30 per transaction and will probably be itemised within your conveyancing solicitor’s fees.
- Mortgage arrangement fee
The mortgage arrangement fee is one of the most common ‘hidden costs’ when it comes to buying a house and this is because it varies so much.
The fee is for your lender to set up the mortgage. However, some lenders will waive the cost to gain your custom, meaning there’s no up-front fee to pay, but some lenders, especially those with lower interest rates will charge a mortgage arrangement fee which can be anywhere from around £2,000. Check with your mortgage provider.
- Estate agent fees
If you are a first-time buyer there is no need to worry about this one; however, if you are selling a property you will likely pay estate agent fees.
These fees may be around 1.8% plus VAT of the property’s selling, or more if your property is listed with more than one agent and is usually payable upon the sale of that property. Be sure to shop around before committing to your estate agent.
Don’t forget the VAT. Whether that’s on estate agent fees or solicitors fees, make sure you factor in any VAT when learning about the different costs.
- Property fraud fee
Selling your home can attract many fraudsters. Your solicitor or conveyancer may ask to double check the credentials of any solicitor he/she is required to work with.
The check is paramount for your safety and security and only costs around £10 per check and will probably be itemised within your conveyancing solicitor’s fees.
- Maintenance fee
Some properties may require you to share some communal spaces. For example, you may have to share a stairwell or garden. There is usually a monthly cost for the upkeep of these spaces and a deposit may be required.
It is worth checking with your estate agent, conveyancing solicitor or with the seller directly to see what maintenance fees you might incur.
- Moving costs
And then there’s the actual cost of moving! You may want to consider putting money aside to help you with this. Whether it be to help pay for boxes, bubble wrap and a removal vehicle with appropriate insurance, or a complete moving service. You should shop around and prices and services can vary.
Moving home can involve hidden costs but the final results are priceless. Make sure to use our guide as a checklist to ensure that you’re prepared!