New research suggests that the combination of high estate agency fees and stamp duty could be deterring homeowners from downsizing.
According to online estate agent OwnerSellers, the cost of downsizing from an average family home to a flat is £17,843.
This is based on the value of a detached family home in England, which has an average price of £381,211, and buying a two bedroom apartment at an average price of £268,174.
The two highest downsizing costs are estate agency fees – which are typically 1.8% of the sale price – and stamp duty. In the case of downsizing from the family home, average agency fees come to £8,234, including VAT at 20%, followed by stamp duty of £5,909.
Other expenses add £3,700 to the bill and cover conveyancing fees of buying and selling (£2,050), survey home buyer’s report (£600) and removals and packing (£1,050).
Unsurprisingly, the most expensive region for downsizing costs is London, where the total bill is a whopping £42,332. A family home at £994,931 would attract agency fees of £21,491, while stamp duty would be £17,141.
The South East was the next most expensive region for downsizing with total costs similar to the national average of £17,248, followed by East of England at £14,273 and the South West at £12,865.
In the East and West Midlands, North West and North East, agency fees are by far the larger cost of downsizing compared to stamp duty, which is minimal, as flats are considerably below the value band of £250,001 above which the 5% stamp duty kicks in.
Rupert Cattell, CEO of OwnerSellers, said: “Estate agency fees and stamp duty combine to make downsizing hideously expensive and this is even before you start adding in other key costs such as surveys, removal fees and, legal fees.
“Stamp duty still presents a major cost, particularly for those living in London, South East and East of England, and continues to deter people from downsizing. This is causing a bottleneck in the family homes market, preventing growing families from taking the next step up the property ladder and fuelling the imbalance in the market. However, one way to limit this is to move to a far cheaper area, but this still leaves a large estate agency bill for selling the family home.”
| Downsizing Costs | |||||||
| Detached House1 | Flat1 | Agency fees | Stamp Duty | Other expenses | Total | Home value % | |
| England | £381,211 | £268,174 | £8,234 | £5,909 | £3,700 | £17,843 | 4.68 |
| London | £994,931 | £492,815 | £21,491 | £17,141 | £3,700 | £42,332 | 4.25 |
| South East | £540,843 | £218,324 | £11,682 | £1,866 | £3,700 | £17,248 |
3.19 |
| East | £417,588 | £202,629 | £9,020 | £1,553 | £3,700 | £14,273 | 3.42 |
| South West | £370,152 | £183,507 | £7,995 | £1,170 | £3,700 | £12,865 |
3.48 |
| West Midlands | £309,708 | £133,033 | £6,690 | £161 | £3,700 | £10,551 |
3.41 |
| East Midlands | £265,820 | £117,082 | £5,472 | £0 | £3,700 | £9,442 |
3.55 |
| North West | £291,747 | £132,658 | £6,302 | £153 | £3,700 | £10,155 |
3.48 |
| North East | £277,371 | £127,853 | £5,991 | £57 | £3,700 | £9,748 | 3.51 |
