Analysis Shows Plummet In Cost Of Moving Home

Posted 14 October 2020 by Keith Osborne

New research has seen the average person buying and selling a home saving a small fortune – but not the first-time buyer...

The cost of moving home has plummeted by 39% over the past three months, saving the average person buying and selling a home in the UK £4,242, according to reallymoving’s annual Cost of Moving research.

The numbers show that from £10,911 before the Stamp Duty holiday came into effect on 8 July 2020, the national average has come down to £6,669.

But for the average first-time buyer (FTB), who may already have been exempt from paying Stamp Duty, total costs have risen by 8% (£136).

The comparison site for home mover services has analysed data from 239,000 quotes in the last year to reveal that while legal fees, estate agent fees, survey and removal costs have all risen, now is the cheapest time to move home in decades as a direct result of the temporary suspension of Stamp Duty charges on purchases up to the value of £500,000.

With house prices having a significant impact on moving costs such as estate agent fees and legal fees, a sharp rise in the average house price since the Stamp Duty holiday announcement has contributed to a rise in the cost of other services. The largest expense for home movers who are both buying and selling is currently estate agent fees averaging £3,936 (a 14% increase), followed by legal fees at £1,682 (up 15%). The cost of a survey has risen by 10% to £450 and although varying significantly depending on the distance of the move and the volume of possessions transported, removals charges have also increased by 3% to £546. The cost of an Energy Performance Certificate (EPC) remains unchanged at £55.

reallymove tablesThose moving within London and the South East are currently enjoying the largest financial incentive to ensure they move before the Stamp Duty holiday ends on 31 March 2021. The cost of a move in London has more than halved from £25,255 before the Stamp Duty holiday to £12,061 after – a saving of 52%. Significant savings are also being enjoyed by movers in the South East (-53%), East of England (-47%) and South West (-40%), while the smallest savings are being made in the North East (-17%), Northern Ireland (-20%) and Wales (-22%) where transaction taxes were already lower based on the median house price.

Less impacted by the Stamp Duty holiday due to the fact that FTBs were already exempt from paying the tax on purchases up to £300,000, this group have instead been impacted by an increase in associated moving costs such as legal fees (+11%), surveys (+5%) and removals (+4%), partly due to a sharp rise in property prices. FTBs in London get a particularly raw deal, paying nearly a quarter (24%) more than the UK average in upfront moving costs at £2,218.

Since the Stamp Duty holiday came into effect, home movers (buying and selling) are spending just 22% of their average income, based on the median UK salary of £30,420, on financing a move compared to more than a third (35%) previously. With cash to cover up-front costs being one of the biggest barriers to moving home, this increase in affordability has been a significant incentive for people to move quickly, creating a spike in demand from buyers and boosting liquidity. Consequently, reallymoving is currently seeing unprecedented levels of demand across the market.

CEO Rob Houghton said: “The cost of moving has been steadily climbing for many years but the Chancellor’s Stamp Duty giveaway has made now the cheapest time to move in decades for those buying and selling a property.

“There’s little let up for first-time buyers, who are facing increased house prices and greater moving costs than a few months ago, making it even harder to save enough for a deposit and to cover the upfront costs of buying a home. Despite this, levels of demand from first-time buyers remains reassuringly high, suggesting they’re still finding ways to buy including through Shared Ownership, Help to Buy and the Bank of Mum and Dad.

“While it’s best to act quickly to take advantage of the Stamp Duty savings, buyers should also bear in mind that we’re probably seeing a temporary spike in house prices so for some it may be better to wait until the holiday ends when prices are widely expected to return to more normal levels. In an unpredictable market it’s more important than ever to compare ratings and customer reviews when searching for home move services, as well as price, to ensure that when you do decide to buy, your transaction progresses as smoothly as possible.”

 

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