The hidden costs of moving house and how to avoid them

The property market is currently undergoing a resurgence after months of lockdown stagnation and the stamp duty tax burden cut for most buyers by the Chancellor.

Moving house has always been expensive – property prices are at an all time high and increasing numbers of homes are being sold above asking price.

But despite this, a recent survey found that more than half of home movers find the process more expensive than they initially thought it would be.

We take a look at the hidden costs of moving as well as some of the easiest ways to save money in your new home.

Property prices are at an all time high and more homes are being sold above asking price

Property prices are at an all time high and more homes are being sold above asking price

Property prices are at an all time high and more homes are being sold above asking price 

Watch out for unexpected fees 

Movers usually expect to shell out a large sum on stamp duty, agent commission and deposits but other buying costs can add up to as much as £9,500, according to Compare The Market.

The comparison site’s latest home movers index found that most movers can expect to factor in new furniture, removal hire and decorating or improving the previous property on top of what they’re already paying. 

But on top of this, the average mover spends approximately £1,500 on unforeseen costs, the study found.

Mortgage product fees, conveyancing fees, and moving home supplies are the top three factors that movers over the past year had not fully accounted for – leading as many as a quarter to rely on credit card spending to plug the gap.

Anna McEntee, of Compare The Market, said: ‘Moving home is considered one of life’s most stressful experiences due to the complicated, expensive and time-consuming nature of it all. It can also be an extremely exciting time. 

‘Parts of the home moving process can be rushed into without potentially considering whether this is the best value for money option.’ 

What are the easiest ways to cut down on extra costs when moving home?

Switch broadband, electricity and insurance providers

According to Compare The Market over a fifth of movers don’t switch broadband provider and two fifths stick with the new property’s pre-existing energy supplier.  

Average energy and insurance costs by region 
Region Average cost of home insurance  Average cost of energy 
East Anglia £159.40  £1,523.53
East Midlands £142.86  £1,703.81
Greater London £252.31  £1,494.04
North East £150.56  £1,615.73
North West £152.04  £1,516.31
Scotland £190.64  £1,579.11
South East £174.52  £1,592.34
South West £153.72  £1,536.36
Wales £145.17  £1,547.13
West Midlands £139.64  £1,615.41
Yorkshire And The Humber £151.36  £1,487.89
Source: Compare The Market 

When it comes to energy, consider switching to a smaller provider. 

The Big Six energy providers still hold the lion’s share of the market but there other suppliers which can often be cheaper. 

Taking your gas and electricity from the same supplier can also end up costing you more money, so check to see if you can get a better deal elsewhere. 

The quickest and easiest way to do this is to use a price comparison site.

Once you’ve found the right deal, taking regular meter readings can make sure your bills are more accurate and not just based on your provider’s estimate.

The same goes for home insurance. A fifth of movers have an existing home insurance policy which they move across, whereas one-third wait until they have moved before purchasing. 

If you’re using an existing policy, it might be cheaper to shop around. Insurers bank on customer inertia and offer the cheapest deals to new customers. 

The financial watchdog recently proposed to ban this, but for the time being it will most often pay to switch. 

Usually, your lender will require you to have buildings insurance in place from exchange. 

If you don’t there will be nothing protecting the property between exchange and completion, as the seller’s insurance won’t be in place. 

How to cut your energy bills now 

While switching is the main way to cut your energy costs, there are other things you can do to cut your costs quickly. Here we’ve listed five of the easiest ways to cut your energy bills.

1. If you’re in credit to your supplier you can ask for the money back. Households paying via direct debit pay a set amount each month for their gas and electricity. 

But for some months of the year – usually when it’s warmer so during summer and spring – your energy account will be in credit. This is your money and it is possible, if you want the cash and the interest, to contact your supplier and ask for this to be transferred to you.

2. Cut your energy usage. It sounds simple enough but if you change the way you’re using your gas and electricity, and if you’re able to reduce your usage, your bills will go down.

Small changes can make quite a big difference. If you turn your main central heating thermostat down by 1˚C, for example, you could typically save around £85 to £90 a year – if you live in a typical three-bedroom semi-detached house with gas central heating.

3. Paying via direct debit and using an online account could cut £10 or more off your annual bills. If you’re able to pay your energy bills via direct debit, so one fixed payment is made per month, this could be cheaper than other methods. 

Having an online account, and choosing paperless billing, can also cut your bills, often by around £10 to 20 per year.

4. You can still save money even if you don’t switch suppliers. While typically the biggest savings are still to be had by switching providers, if your current supplier is offering a cheaper tariff than the one you’re currently on, you could switch to it and cut your bills. 

To find out if you could save, contact your supplier and ask if what the cheapest tariff available is, if it’s less than your current deal then ask it if you can switch.

Scrimping on a survey might cost you more 

Surveyor costs can range from around £250 to upwards of £600 and it might be tempting to go for a cheaper option if you’re trying to cut down on moving costs.

However, a cheaper survey may not look for issues that could end up costing you much more in the future.

For example the cheapest survey packages around may not look for issues such as subsidence or damp which can greatly affect the value of the property.

If you do find issues that will cost a lot to fix, you may wish to renegotiate the sale price, or pull out altogether.   

If you’re buying with a mortgage, your lender will carry out a valuation survey, which in most cases you will have to pay for.

Using an online estate agent can end up saving you money but it does come with downsides

Using an online estate agent can end up saving you money but it does come with downsides

Using an online estate agent can end up saving you money but it does come with downsides

Find cheap ways to pack your things

It might sound obvious at first but moving supplies can be one of the last things on the priority list when dealing with everything else involved in moving house.

One in five movers don’t factor the cost of moving supplies in their budget, and while not as expensive as mortgage fees or bad insurance deals, the costs can still quickly add up.

Asking the local supermarket or someone you know who has recently moved for spare boxes can help, as can investing in some cheap laundry bags to move clothes and bedding.

It will be up to you how far to go with this to save money. You could decide to save old newspapers to wrap fragile items, or you might rather just spend £10 on a roll of bubble wrap to save time. 

Finding the right balance here means saving money but not adding unnecessary stress to your move. There are websites that specifically sell supplies for moving house, and these can often be cheaper than buying materials piecemeal.

Conveyancing fees will quickly add up

Conveyancing fees can quickly mount into the thousands of pounds when buying a home. Your estate agent will often recommend a solicitor, but this might not always be the best option, and it could pay to shop around. 

Online conveyancers are usually a cheaper option, but may not offer the same level of service as a high street firm. 

There are also firms out there who work on a ‘no sale, no fee’ basis, which means you won’t have to pay if that sale falls through, which might be worth considering. 

Typical conveyancing costs 
Fee Amount
Anti-money laundering checks £6 – £20
Bankruptcy search £4
Title deeds copy £6
Local authority searches £250-450
Property fraud check £10
Transferring of ownership £200 – £300
Bank transfer fees £20 – £30
Stamp Duty Land Tax 0-12%
Help to Buy supplement £200 – £300
Gifted deposit £50 – £100
Lifetime/Help to Buy ISA £60
Source: Homeowners Alliance  

Find a mortgage that won’t sting you with large fees

Mortgages for those with only a small deposit are hard to come by at the moment but for those looking for a lower loan-to-value deal financing a home is currently very cheap.

To switch deals you typically have to pay a ‘product fee’, which can amount to thousands of pounds. 

Sometimes a deal can look good on the surface with a temptingly low interest rate, but extra fees can mean you’ll end up paying more.

To find out how much you could borrow and check rates, you can This is Money’s online mortgage finder here

You can then use our true costs mortgage calculator to see how cheap a deal really is with the fee included. 

While you’re looking for a mortgage, keep in mind that some lenders offer incentives such as paying your legal fees for you. 

These can significantly help keep costs down if paired with the right deal, so always check the extras that lenders are offering.

COMPARE BROADBAND DEALS

This is Money has partnered with Broadband Choices to help get you the best deals on your broadband possible. 

They negotiate exclusive perks and rewards as well as offering the chance to compare deals from all the biggest and best providers. 

To see if you could save by switching, check out This is Money’s broadband switching service now.

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