Cost of moving home in UK plummets by almost 40%

The cost of moving home in UK has plummeted by almost 40%, according to reallymoving’s annual Cost of Moving research, released today (28 September).

Main points:

• The cost of moving home has fallen to just £6,669 from £10,911 before stamp duty holiday
• Movers in London and the South East have seen the cost of moving fall by over half
• Other moving costs such as legal fees have been pushed up by rising house prices
• The UK cost of moving as a percentage of purchase price has dropped from 3.6% to 1.9%
• First-Time Buyers, less impacted by SDLT changes, have seen moving costs rise by 8% to £1,795

The cost of moving home has plummeted by 39% from £10,911 before the stamp duty holiday came into effect on 8^th July 2020 to £6,669 after, saving the average person buying and selling a home in the UK £4,242, according to reallymoving’s annual Cost of Moving research, released today.

The UK’s leading 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 (+14% increase), followed by legal fees at £1,682 (+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.

Table 1: Change in the cost of moving home in the UK in 2020

Table 2: Annual change in median property price for repeat movers (buying and selling) and FTBs

Movers in London and South East save the most

Those 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 next year. 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.

Graph 1: Moving costs 2020 – Repeat movers (buying and selling)

First-Time Buyers see moving costs rise

While those buying and selling a home have seen costs plummet, UK First-Time Buyers have seen the cost of buying their first property rise by 8% on average. Less impacted by the stamp duty holiday due to the fact that First-Time Buyers 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. First-Time Buyers in London get a particularly raw deal, paying nearly a quarter (24%) more than the UK average in upfront moving costs at £2,218.

Graph 2: Moving costs 2020 – First-Time Buyers

Cost of moving as a proportion of income

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 [1], 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 up-front 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.”

References:

Data from ONS Annual Survey of Hours and Earnings 2019: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2019.

Kindly shared by reallymoving.com

Main article photo courtesy of Pixabay