If the uncertainty over house prices is causing you to sit tight in your current property rather than move, you are not alone! Not only are house prices dropping but the costs of moving home have soared and many more people are considering it more economic to make home improvements than move.
Let’s consider the costs of moving: first there is the obligatory Home Information Pack. Under new government legislation you cannot now sell a house without first purchasing a HIP which, for an average property will cost in the region of £650.
Next, estate agents' fees will take one to two per cent of your home’s value and that is likely to rise as whenever the volume of homes being sold reduces, estate agents put up their fees in order to maintain their profit margins. So, if the home you are selling is at the UK average you will be shelling out around £1,800 - £3,600 depending upon how well you can negotiate!
Next the tax; stamp duty at one per cent is payable on any property sold at over £60,000 up to a value of £249,999. Properties costing between £250,000 and £499,999 attract a rate of three per cent which rises to four per cent for those that sell for over £500,000. The only exceptions to paying stamp duty are if you purchase a house that costs less than £150,000 in any of 2,000 ‘designated disadvantaged areas’.
Then there are solicitors and their legal fees which will account for £1,000 upwards depending upon the values of the properties you are buying and selling. Next come removal and possibly storage costs, and all the associated costs of transferring utilities, telephone lines and a myriad of other items. That will take care of at least another £1,000.
They all add up to a tidy sum, somewhere between £15,000 - £20,000 for a move between two modest properties, where the one being bought costs over £250,000, and that does not include any fees that may be applied to your new hard-to-get mortgage.
Look at it like that and it’s easy to see why many people are opting to think about shelling out on home improvements rather than go through the stress and incur the financial costs of moving.
Rather than put the house on the market you could build a sizable extension, or if the carpets are getting a bit worn or tired you could replace them. Perhaps you might forego the carpets altogether and instead opt for laminate wood flooring that you have always promised yourself, or even a new kitchen?
Or, you might just think it is all far too much effort and jet off on a luxury holiday for the whole family instead!
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