The average property buyer is left more than £6,000 out of pocket after failing to budget for all the costs of moving home.
New research by Aviva shows a typical buyer sets aside £12,143 for the moving process, but actually needs £18,624 in order to meet all expenses.
Kevin Shaw, national sales director at Leaders, says: “With many people saving hard to raise money for a deposit, it can be easy to forget the numerous other costs associated with moving home.
“But if you are to avoid having to ask family or friends for a loan to bail you out or starting life in your new home saddled with debt, you should identify all the expenses that await you and work out exactly how much they will each set you back.”
Kevin has put together a guide to the top five costs - in addition to a deposit - that all buyers should factor into their calculations prior to completion day.
1) Stamp duty
If the property you are buying costs more than £125,000, you will have to pay stamp duty upon completion. This levy is charged as a percentage of the selling price between the following thresholds:
£0 - £125,000 = Zero
£125,001 - £250,000 = Two per cent
£250,001 - £925,000 = Five per cent
£925,001 - £1.5m = Ten per cent
£1.5m-plus = 12 per cent
For example, this means buying a home for £300,000 will set you back £5,000 in stamp duty.
2) Solicitors’ fees
You will need to instruct a solicitor or licenced conveyancer to act on your behalf during the purchase. They will complete all of the relevant legal work and carry out local searches. The searches can cost about £300, while the legal fees can be anything from £500 to £1,500.
A survey will help you find out about the exact state of the property you are planning to buy, potentially highlighting problems that you should be aware of. You can choose from three main types of survey - a condition report, a homebuyer’s report and a buildings survey - and these options range in price from about £300 to £1,500.
Once you have exchanged contracts, you should invest in a buildings insurance policy. Having this insurance will be a condition of any mortgage you take out and covers the cost of rebuilding or repairing your home should it suffer structural damage. You should also protect your possessions by taking out contents insurance.
A removals firm is likely to charge several hundred pounds to move your furniture and other possessions to your new home. You could do it yourself, but it will take a lot of time and effort, so if you want to use a professional remember to budget for it. There are a range of services you can choose from and the cost will vary depending on factors such as how far you are moving, how many possessions you have and whether you want a packing and unpacking service.
Kevin adds: “Buying a house comes with a list of expenses, so it is important to investigate every aspect of a property before putting in an offer. The last thing any buyer wants is to find out they do not have enough cash to cover their costs just weeks - or even days - before completion.”
For advice you can trust on buying or selling a property and the local market in your area, please contact your nearest Leaders branch today.