The cost of moving home has gone up on average by £870 (9%) over the past year to £10,996, new research has revealed.
Lloyds Bank – who carried out the study on homeowners moving to a different property rather than on first-time buyers – says that house price growth is the main factor behind this hike in moving costs, pushing up the cost of estate agents’ fees, stamp duty and legal fees.
It points out that this 9% rise is much higher than the 0.5% increase in the consumer price index and annual growth in average earnings of 1.5%.
More than half of this increase can be put down to homeowners paying higher fees to estate agents. Estate agency fees have risen by £402 (8%) to £5,404 this year. Stamp duty also increased on average by £372 (17%) to £2,504, while legal costs have risen by £93 (8%) to an average of £1,251.
Table 1: Cost of moving home by category 2006-2016 (£s)
|2006||2015||2016||1 year % change||1 year £ change|
|Energy Performance Certificate||n/a||60||60||0%||0|
Sources: Lloyds Bank, Halifax, Which? Pickford and ONS. *Based on Q2 data.
Moving in London
Homeowners in Greater London will have seen moving costs rise by £4,732 (18%) over the past year – which is five times the national average.
Lloyds Bank says the main reason for this is that house prices in London have risen by 14.5% over the past year compared to 8.5% in the UK as a whole.
Moving house in London will cost, on average, a whopping £31,416 – with home movers paying more than £15,000 in stamp duty and £11,000 in estate agents’ fees. Workers in London will pay 72% of annual gross earnings, compared with 32% nationally.
Over the past 10 years, the cost of moving house in London has risen by £12,680 (68%) from £18,736 to £31,416.
Home movers in the South East are the group facing the second most expensive outlay. It costs £20,210 to move in this region – up £3,382 (20%) since last year.
In contrast, Wales has witnessed virtually no increase in moving costs, with only small increases in the North West (1%) and Scotland (2%). In Northern Ireland, moving costs are up by 6%.
Costs up 25% over 10 years
Over a decade, the cost of moving in the UK has gone up by £2,206 (25%) from £8,790 in 2006 to £10,996 now – in line with average house price growth over the same period. In the meantime, average gross annual earnings for a full-time worker have risen by just 17%.
Mike Songer, mortgage director at Lloyds Bank, says: “The cost of stepping up the housing ladder has continued to rise sharply over the past year. As a result, the cost of completing a home move in the UK has grown significantly over the past decade, to nearly £11,000.
"This trend is especially marked for buyers in London and the South East with the combination of both higher property prices and more rapid increase in prices in recent years resulting in significantly higher moving costs in these parts of the country.”
Commenting on the research, Paula Higgins, chief executive of the HomeOwners Alliance, says: “Higher moving costs are a barrier to first-time buyers who are already struggling to pull together a deposit. Increased moving costs also act as a disincentive to those who may wish to move, but end up deciding to stay put.
“Home movers must also be mindful that they may need to pay mortgage arrangement fees, and these can range from a few hundred pounds to 1% of the mortgage – a considerable sum.”
Table 2: Cost of moving by region 2006-2016 (£s)
|2006||2015||2016||1 year % change||1 year £ change||10 year % change||10 year £ change|
|Yorkshire and the Humber||7,148||6,936||7,730||11%||795||8%||582|
Source: Lloyds Bank, Halifax, Which? Pickford and ONS. *Based on Q2 data.
First-time movers get into debt
In separate research, flat-sharing site Weroom.com has highlighted how expensive it is for young people to move out of the family home for the first time.
It found that moving out of home for the first time puts a quarter (24%) of Brits into debt, while more than a third (37%) borrow money from family before they can afford to leave. Nearly half (44%) underestimated the cost of moving and struggled financially.
First-time movers spend an average of £540 with those living in London having to find £638. However, 15% admit to spending more than £1,000 when they first move out. Paying a deposit to their landlord accounted for 39% of this outlay, while 10% went on furniture.