Throughout 2017, over 800,000 residential properties were sold in England and Wales according to an ONS report. With the average property in the UK valued at £228,000 in June, moving house can be an expensive life change.
Alongside the initial costs of a deposit, mortgage and even furnishing a home, every house move comes with some smaller fees that can often go unnoticed when it comes to planning budgets.
Remortgaging
Typically, if you’re selling a home you’re planning to move to a new property. While existing mortgages can be transferred to the new house, it can be a good time to review your deal and see if you can get better rates elsewhere.
Borrowers have been taking advantage of low interest rates and in January 2018 there were 49,800 remortgages. Moving to a new house presents a great time to re-evaluate your mortgage deal especially if you find yourself coming to end of a fixed rate deal.
However, remortgaging can come with added costs that need to be paid to the lender. An early repayment fee can often be 1-5% of your outstanding mortgage, so making sure any savings you make are greater than the amount you’ll have to pay is essential.
Estate agent fees
From free home valuations and marketing to negotiations and liaising with conveyancers, working with an estate agent can speed up the entire process. However, these benefits don’t come for free and with estate agent fees being added as a percentage of the overall sale to be paid at the end, they can be easy to forget.
Throughout 2017, the average estate agent fee was 1.2% of the final sale, meaning that if a home sold for £100,000, then £1,200 would be the amount payable. Percentages can vary from 1% to up to 3.5% and this will depend on the levels of service you receive from your estate agent.
Conveyancing fees
Selling a home isn’t just as simple as trading the keys for cash, there’s a lot of legal work that goes into the transfer of property. A legal expert will be required to prepare and organise the right documents and get them signed by the right people.
Depending on the firm you use, conveyancers can either charge a flat fee or a percentage of the overall sale. Either way, once the transfer of property is complete, there will be a bill for all the legal work.
Regardless as to whether you’re working with a flat fee or a percentage, you can expect to pay anywhere between £500 and £1500 depending on how complicated the sale is. However, if you’re purchasing a new home alongside the sale, then using the same conveyancer can create an opportunity to negotiate on costs.
Energy Performance Certificates
When a property is being sold, any potential buyers legally have to be provided with an Energy Performance Certificate for the property. The EPC has been a legal requirement since 2008 and grades a properties energy efficiency from A to G.
The cost of the EPC is typically between £50 and £120, so compared to some of the other hidden fees, it is relatively cheap. Once purchased an Energy Performance Certificate is valid for 10 years, meaning your home may already have a valid EPC, saving you a little bit more money.
Typically, these evaluations are carried out by accredited domestic energy assessors and the Ministry of Housing, Communities & Local Government have created a tool to help find local assessors.
The cost of a property chain
Selling one home so that you can buy your next is common practice and is how property chains are formed. However, sometimes these chains don’t go to plan and you could find yourself selling your property before the one you are purchasing is ready.
This can sometimes lead to sellers having to find temporary accommodation and while moving in with family or friends is an option, it’s more likely that you will have to rent. This hidden cost can be a struggle to manage and if you need to store some of your possessions or furniture in the interim that will also increase costs.
With rent, bills and storage all needing to be factored into a new budget, anyone choosing to sell their home as part of a chain needs to make sure they know how things are progressing.
House preparation
From cleaning the property for viewings to van hire, selling a property has many different hidden costs that can soon add up.
However, making sure your property is in the best condition for viewing is well worth any money spent on cleaning and the help of a removals company will only make things simpler once the keys have been exchanged.
Many of these costs only apply to those who are selling their property the traditional way. A rise in home buying companies such as We Buy Any House means that there are quicker and cheaper alternatives to selling your home.
