7 Important Things To Budget For Before Moving Home
5 min read
Last Modified 29 September 2021 First Added 9 August 2016
Moving into your dream home is one of the most exciting times in your life. Whether you’re moving away from parents for the first time, or are finally moving from renting to the world of home ownership, the physical act of moving requires such effort that it’ll be a day to remember. But before the glorious day finally arrives, you will need to be prepared, and that starts with financial considerations and putting together a moving budget.
Below you will find a list of the most important financial considerations to make before moving home. From stamp duty to the costs of a removal van, this list should be in your back pocket from the word go.
The vast majority of people buying a home will employ a solicitor to make sure the legal completion runs smoothly and that the paperwork is all in order. This gives you peace of mind regarding the legal aspect of purchasing a new home. Your solicitor will organise for local searches to be done, which involve researching plans and finding any issues that you will need to be aware of. Local searches can cost between £250 and £300, but different solicitors will offer different fees and it is worth shopping around to get the best price. Legal fees are typically between £500 and £1500 including VAT at 20%, so this is a big part of your moving budget. As a starting point for finding a solicitor, visit the Law Society website on which you can very easily search their official database of over 150,000 legal professionals, and ask family and friends who will give you honest opinions of their own solicitors.
Stamp Duty is a tax charged on houses worth more than £125,000. The rate charged depends on exactly what your house is valued at. Here are the different bands:
Remember that the £125,000 figure is taken away from the value of the property before the charge is applied. So on a house worth £200,000, the 2% charge will only be applied to £75,000. The Money Advice Service has a simple Stamp Duty calculator to help you when estimating the cost of moving house.
Your mortgage lender will need a valuation of your prospective property before offering you a mortgage. The cost of getting a valuation can vary greatly depending on your lender, though some will offer it for free. In Scotland, it’s the seller’s responsibility to provide a home report which will include a valuation document.
A survey will go into more depth than a valuation fee and it’s ultimate goal is provide you with peace of mind and avoid future unexpected costs of moving house. Imagine you are buying a house in an area famous for it’s salt mining, that would make the landscape susceptible to subsidence. A survey will be able to establish this risk for your new home. A full survey can cost you between £250 and £600, but can be more depending on who conducts the survey. See this Money Advice Service Guide for more information.
Mortgage fees are applied by your mortgage lender as a charge for setting up the mortgage. The Money Advice Service says that the mortgage fee may include a booking fee of between £99 and £250, an arrangement fee of up to £2,000 and a mortgage valuation fee of (typically) around £150. There is the option to add the mortgage fees to your monthly mortgage repayments, but then you’ll be charged an interest rate on repayments for the life of the mortgage. We advise you save up and pay it before you move in to avoid the charges.
Removal costs of moving house can vary between £300 and £600 and really depends on how much you have to move. House removal costs will also vary depending on where you live, so it’s worth comparing costs of hiring a removal team against hiring your own van for a day or two and doing it yourself. A removal team will take the physical pressure off your shoulders if you have a large house and family, while doing it yourself with a hired van and some friends might be the best option if you’re moving out of a small place with just your partner.
You will need to change you address on a host of documents, and it’s really worth getting a head start before the chaos of a move which could put it off. Redirecting your post with Royal Mail costs from £24.99 for three months. Here is a list of paperwork that will require a change of address:
Once all this has been added up, you will have a golden number, in addition to your deposit, that you need to attain to be assured you can afford to move home. Speaking as a recent home mover, knowing you can afford to move is one the most satisfying parts of the whole process.
Related – A Step by Step Guide To Moving Home