How to cut the cost of moving home

24 September 2016

With moving expenses rising faster than house prices over the last decade, can you cut costs without cutting corners?

The nitty-gritty

The table below shows what Lloyds included in its calculations, and the average costs in 2006, 2015 and 2016:

 Fees

2006 2015  2016

1 year % change

1 year £ change

Stamp Duty

£2,023 £2,132 £2,504 17% £372

Estate agency

£4,279 £5,002 £5,404

8%

£402

Energy Performance Certificate

N/A £60 £60

0%

£0

Conveyancing

£1,011 £1,158 £1,251

8%

£93

Home removal

£952 £1,109 £1,111 0% £0

Surveyors' fees

£525 £665 £665

0%

£0

Total cost of moving home

£8,790 £10,126 £10,996

9%

£870

Sources: Lloyds, Halifax, Moneyfacts, Which?, Pickford and ONS

As you can see conveyancing, estate agency fees and Stamp Duty account for a large chunk of the total expense, and they have also risen by the greatest amount over the last year. Because wages haven't risen proportionally, the total cost of moving has risen from 30% to 32% of total gross earnings.  

Of course, London and the South East lead the way at £31,416 and £20,210 respectively.

Here are just a few ways that you can cut the cost of your next home move so you can avoid any inconvenient delays.

Cut back on estate agent fees

Estate agency fees remain the largest single component of the cost of moving home, accounting for 38% of total expenses.

Many agents will charge you around 1-2% of the sale price of your home, which totals around £3,000 on an average priced house, or much more if you are selling an expensive property.

Either way, it isn’t pocket change, which is why an increasing number of sellers are looking for online ways to sell their home and save money.

Online estate agents are cheaper because they don’t have to fork out for a branch network. They simply need a website and maybe a call centre.

They offer a range of different price structures from flat fees (starting at less than £400) to a percentage of the property's value (or a combination of the two). You can find online estate agents charging just 0.5% of your property’s sale price for example, a fraction of what you would pay a traditional agent.

Some online estate agents offer a menu approach to their pricing, so you can choose as much or as little help as you need. They may offer advertising and marketing of your property for example, a ‘for sale’ sign outside your house, a floorplan or video tour, or somebody to conduct viewings. You are able to pick and choose each service so you can tailor the costs to your exact needs.

One thing to check is where the online agent will market your property. With so many people househunting online, it is very important to be listed on the major property portals like rightmove.

Save on Stamp Duty

Stamp Duty has seen a massive overhaul in recent years thanks to ex-chancellor George Osborne's Autum Statement in December 2014.

Now the system is much more progressive compared to its previous 'slab' structure. In Scotland Stamp Duty has been replaced by Land and Buildings Transaction Tax which uses the same model but with different thresholds.

The key to saving on Stamp Duty is to pay as little as possible on your property.

 Read more at How to beat Stamp Duty and the Scottish Land and Buildings Transaction Tax.

Go fee-free on your mortgage

Mortgage arrangement fees have more than trebled over the past decade, according to Lloyds. 

Of course, you can choose to add your mortgage fee onto your loan rather than pay it upfront, but then you will be charged interest on it for the duration of your mortgage term, meaning it will cost you significantly more in total.

Alternatively, you could look at fee-free mortgage options, where there simply is no mortgage arrangement fee. Lenders usually offset this perk by adding a little onto your payrate, so you need to decide if saving on your immediate costs is worth it for higher ongoing monthly repayments.

As a rule of thumb the smaller your mortgage the more likely that a fee-free deal will suit you, even if you pay a little more on your interest rate. With a large loan you are often better off making a significant upfront payment in order to secure the lowest rate possible.

Similarly, if you have a high salary but a small savings pot a fee-free mortgage might suit your circumstances, regardless of the fact that the interest rate is a bit higher.

Keep a look out for legal fees and valuation which can really cut your costs.

As always, the best deal for you depends on your individual circumstances, so be sure to do your sums. Below are some of the best fee-free mortgages on the market right now:

Variable rates

Lender

Type of deal

Rate

Max loan-to-value

Progressive BS

Two-year discount

1.34%

60%

First Direct

Term tracker

2.64%

75%

Danske Bank*

Term tracker

2.44%

80%

Loughborough BS

Three-year discount

1.89%

85%

Platform

Two-year tracker

1.79%

70%

Legal & General Mortgage Club

Two-year discount

1.64%

80%

*Available in Northern Ireland only 

Fixed rates

Lender

Type of deal

Rate

Max loan-to-value

Chelsea BS

Two-year fix

1.74%

75%

HSBC

Two-year fix

1.69%

60%

Chelsea BS

Two-year fix

1.69%

65%

AA Mortgages

Four-year fix

2.78%

75%

First Direct

Five-year fix

2.18%

75%

Nottingham BS

Five-year fix

3.09%

90%

At loveMONEY, you can research all the best deals yourself using our online mortgage service.

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