22nd April 2014
The price tag just for the privilege of moving home now stands at more than £8,000 as increases in the associated costs continue to rise writes Philip Scott.
According to research from Lloyds Bank, home movers can now expect to typically pay £8,248, an increase of 6% in the past year.
As a result of this rise in costs and an increase in home sales in the last year, the total amount spent on moving has grown sharply by 27% in 2013, from £5.2bn in 2012, to £6.6bn.
The rising cost is being driven by increases in stamp duty, estate agency fees and legal fees, which are all up by 7% in the last year.
These fees, which are typically impacted by rising house prices, make up the bulk of the £8,428 cost, as there has been no change in removal costs and surveyors fees. The average-spend on stamp duty and estate agency fees now stands at £2,001 and £3,601 respectively says Lloyds.
In the decade since 2003, the total cost of moving has increased by 22%, compared to house price rises of 31%. In this period, average gross annual earnings have increased by 29%, meaning the total cost of moving as a percentage of earnings has fallen marginally, from 26% to 25%.
Moving in London costs nearly five times more than in Northern Ireland
The analysis also found that the home mover process for those living in London and the South East is even more expensive, with the average cost now significantly higher, at an eye-watering £20,825 and £16,187 respectively. The average home mover in London pays £10,850 in stamp duty and £6,510 in estate agency fees.
Significantly, the cost of moving in London equates to nearly half, at 47%, of the average gross full time earnings, at £43,866, for London residents.
The South East has seen the highest rise in the cost of moving over the last decade, with an 85% increase from £8,773 to £16,187. This is substantially higher than any other region and stands at 42% of the average gross full time earnings for the region. A huge rise in the average stamp duty payment as a result of higher house prices, from £2,250 to £8,157, has driven this increase.
The most affordable place to move house is in Northern Ireland, where the average cost is £4,253, 15% of average gross earnings. Since 2003, the cost of moving in Northern Ireland has reduced 15% too, as the average house price has dropped below the level at which stamp duty is paid, significantly reducing the total cost.
Marc Page, Lloyds Bank mortgages director, says: “The cost of moving can be an expensive one, and rising house prices have had an impact on this with more property sales now within higher stamp duty brackets. On top of the costs of moving, homemovers also need to consider the costs involved with changing mortgages, such as product and administration fees.
“However, as earnings have also risen in the last 10 years at a higher rate than the cost of moving, at a national level the relative cost of relocating to a new property is actually lower than it was in 2003.”
Cost of moving home by category 2003-2013
|UK||2003(£)||2012(£)||2013(£)||% change year||% change since 2003|
|Estate agency fees||2,967||3,351||3,601||7%||21%|
|Total Moving Cost||6,737||7,788||8,248||6%||22%|
|Total Moving Costs as% of gross full time annual earnings||26%||24%||25%||–||–|
Sources: Lloyds Bank, Halifax, Which?, Pickfords,ONS