Two-thirds of prospective homebuyers are underestimating the cost of moving home by nearly £2,000.
According to Post Office Money and the Centre for Economics and Business Research, homebuyers will spend an average of £9,472 on the additional costs of moving home.
However, on average they are only budgeting for £7,643 – a difference of £1,829.
Additional costs of moving include estate agent fees, stamp duty, conveyancing fees, surveyor fees and removal costs.
The cost of moving has increased by 8% over the last year and 25% over the last decade.
However these cost increases could have been significantly higher were it not for recent changes implemented by the government.
The removal of the stamp duty land tax “slab” system – which saw all homeowners charged at a percentage of the price paid for their property, resulted in the average stamp duty bill falling from £4,227 at the end of 2014 to £1,774 at the end of 2016.
However, forecasts indicate the additional costs of moving will hit £12,267 by the end of 2020 and would-be buyers will face an even greater challenge for the amount they need to set aside.
These expensive moving costs present a challenge for prospective home buyers and movers who also need to find £94,200 to pay for a deposit on the average home.
While this has remained fairly consistent in recent years, over the last decade, the average deposit has increased by 36%. Deposit costs also remain high for first-time buyers, who can expect to pay an average £50,136 on their deposit.
One of the most significant moving costs to increase over the past 10 years is the fee charged by surveyors. This cost has jumped by 53 per cent since the end of 2006 (from £498 to £764 in 2016).
Those hoping to move in the South East have been one of the hardest hit by increases, with additional costs rising by 72 per cent in the last 10 years (from £8,809 in 2006 to £15,114 in 2016). But London remains the most expensive place to move home with an average cost of £26,673.
The additional costs of moving home remain the highest in London and residents of the capital are the most likely to underestimate the additional costs, with prospective buyers in the city budgeting £8,838, significantly less than the £26,673 they should expect to spend.
Owen Woodley, managing director at Post Office Money, said: “Forecasts indicate the cost of buying and moving will only continue to rise over the next five years, even with the impact of revised stamp duty rules introduced to reduce the impact on prospective buyers’ wallets.
“With research indicating that 65% of these buyers have underestimated how much they should budget for these costs, careful and considered budgeting is essential at a time when they are already likely to be financially stretched.”
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