Reduce the hidden costs of moving house

Moving house? All the information you’ll need to reduce the ‘hidden’ costs of moving and ease the stress

Moving home is reportedly one of the most stressful events in a lifetime, only beaten by divorce and bereavement. Unfortunately, it’s also one of the most expensive, so any advice on how to limit the expense and avoid ‘hidden’ costs is welcome. Here, Mark Cooper, Managing Director of Homeimprovementquotes.co.uk, looks at the costs involved in the run-up to moving and ways to help keep costs to a minimum.

The latest research by social housing pressure group the National Housing Federation claims that house prices will rise to an average of £300,000 by 2012 – an increase of 40 per cent. House prices have already risen by 156 per cent since 1997 but in the last ten years the average income has only increased by 35 per cent.

Getting the funds to afford a house is difficult enough – even for people earning a very respectable wage – because the price of a typical house is around seven times the UK’s average income, according to Government statistics. Fortunately, after five consecutive interest rate rises in 12 months, the Bank of England maintained its interest rate of 5.75 per cent during September. But what about the hidden costs of moving? Britons spend £10 billion a year on ‘hidden’ expenses when moving house, new research from the Cooperative Bank has claimed.
This bill can include all costs except for the actual house price, with solicitor and estate agent fees, stamp duty and removal charges all mounting up, meaning that the average UK household spends £23,800 on these expenses during a lifetime.
So, how can you move house without it costing you a fortune?
There are in fact a number of ways that you can reduce your moving expenses to a minimum.

Don’t pay over the odds – use the internet to research: How did we cope before the internet? By knowing where to look, the web makes it possible to investigate an area you’re considering moving to. You can find out almost anything about a place, from crime and flood risks to what new buildings are in the pipeline, which could potentially devalue your new house. These are free pieces of information that can save you from making a big mistake and losing money on your investment. You can also find out almost anything about properties you are interested in – including houses that have dropped in value or are difficult to sell, how much similar houses have sold for or which council tax band houses have been placed in.

The advantages of New Builds: These properties usually come with a new bathroom, fitted kitchen and are low on maintenance. Many building companies offer deals to first-time buyers. Persimmon, for example, will pay a 5 per cent deposit for you on selected properties and others offer free curtains and carpets.

Getting the right mortgage: Using a mortgage broker to scan the mortgage market can provide you with more influence and protection than an independent bank. Higher lending charges may apply if you borrow more than 90 per cent of the property’s value so by saving up the deposit on a house, interest rates will be significantly reduced. Some mortgage lenders will offer free arrangements or booking fees, but be careful – anything ‘fee-free’ may be priced into a slightly higher rate of interest, making it more expensive in the long run, so consider the options. Also spend your time shopping around for mortgages because, according to BBC News, more than half of all borrowers pay over the odds for their mortgage each month.

Survey: A small number of mortgage lenders will provide a survey free of charge but if yours doesn’t then a basic one will only cost around £250 – compared to a full structural survey which can cost upwards of £600 – so take advantage of this if you’re investing in a relatively new build.

HIPs: Home Information Packs (HIPs) are a set of documents that contain specific details about your property. Initially they applied to four bedroom and above houses, but since September three-bedroom houses have also been included. Many major estate agent chains are offering HIPs as part of their ordinary fees; others are charging in the region of £300 to £350 plus VAT on an upfront or deferred basis – so it’s worth asking the question. All the information you need on HIPs can be found in our earlier article - click here.

Estate Agent: Many estate agents charge upwards of 1.5 per cent of your sale price. Some ‘virtual’ estate agents offer a free service to advertise property over the internet, while others offer a more comprehensive package for a one-off fee of around £200. Some agents may try and encourage customers into giving them their business by offering free HIPs – but, as with the mortgage provider, anything that is branded free of charge will possibly be paid by you elsewhere, so check all the costs.

Stamp Duty: For houses priced £125,000 and under, stamp duty does not apply but for more expensive houses there are three separate thresholds. If your new house is bought for £125,001+ the stamp duty is one per cent of the price, £250,001+ the fee is three per cent and £500,001+ the stamp duty is four per cent. This means that buying a house for £250,000 rather than £250,001 could save you £5,000 in tax! Check on paying separately for fixtures and fittings to see if you can reduce the house sale price and consequently the stamp duty. Alternatively, you may consider taking advantage of the stamp duty exemption scheme implemented in around 2,000 "disadvantaged areas" across the UK – a full list is available at www.inlandrevenue.gov.uk/so/pcode_search

Moving Day: Removal companies can cost anything from £450 upwards. By hiring a van, inviting some friends around, buying in refreshments and doing the hard work yourself you can save over £300 – a decent percentage of your first mortgage payment – plus you can take extra care with those expensive family heir-looms!

Utility Bills: Ask the existing home owners for a utility bill to get an idea of how much a property costs to run. Consider the following
· Get your gas and electricity from the same provider
· Pay your bills by direct debit
· Choose an on-line tariff
· And don’t forget to search the market every year for cheaper providers.
Then of course, remember to sign-up for essential services on your moving day so you can plug in the TV and boil a kettle!

Changing address: You need to tell more than just your friends about your change of address. If you don’t keep up with your TV license or credit card bills then you could be charged for missed payments – so it can prove costly. www.iammoving.com lets you compile a list of all the people and companies who need to be informed about your change of address and they do all the hard work for you. Easy!

…and finally…don’t be afraid to challenge:
Many people are living in, or moving to, incorrectly banded houses. You can now check and challenge your council tax band free of charge, possibly winning a backdated payment from when you moved into the property, as far back as 1993 when the tax started. All you have to do is check your banding against your neighbours’, using the Valuation Office agency's website, and then visit www.nethouseprices.com, a free public service providing access to UK house prices in England, Scotland and Wales, as recorded by the Land Registry since 2000. Web calculators are also available to help you find out what your house was worth in 1991 when council tax bands were allocated. If both these steps show you're in the wrong band then you can challenge it – just be sure of your facts and figures before hand, because bands can also be increased!

For more information please visit www.Homeimprovementquotes.co.uk