by Mark Johnston
Moving home is fast becoming a very expensive business. Once a home owner has overcome the big hurdle of raising a large deposit or equity mortgage lenders want for good rates, they then need to dig even deeper to actually find the cost of the move.
This added high cost of moving seems to have therefore played a major part in keeping property sales stuck at record low levels.
Reports have shown that the cost of moving has risen at a rapid pace, faster than both house prices and inflation.
This rise is the fourth highest of any of the regions of the UK and this is also above the British average rise of 69%.
These figures are not only absurd but to put them in to perspective it is even worse, it means that the cost of moving home is now equal to 27% of average earnings before tax and this is up from 22% in 2001.
The significant rise in home moving costs is particularly concerning at a time when demand in the UK housing market is weak.
The increase in moving costs is as a result of rises in all 6 house moving expenditure categories:
– Estate agent fees are the single largest contributor to the cost of moving, these fees have rose by £1,318 or 38% in the last decade.
– Stamp duty costs are a close second contributor and amounts to 21% or £1,876 of moving costs
– Mortgage arrangement fees account for 12% of moving costs. These fees have trebled since 2001
– Finally conveyancing has increased to approximately £366, removal services are approximately £305 and surveying is approximately £140.
Greg O’Neil, of Cardiff estate agency Thomas George, has suggested that “the increase cost of moving has hit buyers across the spectrum, largely because they lack the equity cushion which they might have had a decade ago”.
Stephen Noakes, director of mortgages at Lloyds TSB, suggests “with the cost of moving at its highest level since 2007, consumers struggling to cover the costs should look to make savings where ever they can”.
Recent research has shown that only 24% of people who have moved home in the last 3 years budgeted adequately, of the remaining 76%, 61% relied on savings to cover the costs, 18% fell back on friends and family, 16% used their credit cards and just 14% were able to use existing equity.
First time buyers however are significantly in a better position when it comes to moving home as they pay on average 63% less. This is mainly due to having no property to sell and therefore no estate agents fee and also due to the current stamp duty break.
In conclusion Suren Thiru, housing economist at Lloyds TSB, said “the task for those looking to move home has undoubtedly become more challengin
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