The government’s stamp duty holiday has driven a steep drop in the costs associated with moving house. But moving costs have risen for first-time buyers.
The cost of moving home has nosedived 39% this year for the majority of movers.
The steep decline can be explained by the stamp duty holiday announced by the government in July, saving buyers an average of more than £4,200.
A typical homemover now spends £6,669 on associated costs, down from £10,911 before the stamp duty holiday was introduced, according to the moving services website reallymoving.com.
The fall in stamp duty costs more than offsets increases in the amount movers paid for other services, such as legal fees, estate agents’ fees, surveys and removals, which have all risen in recent months.
Overall, the cost of moving for an existing homeowner was equivalent to 1.9% of the price of the property they were purchasing, down from 3.6% before the stamp duty holiday.
However, first-time buyers saw the associated cost of moving go up.
Why is this happening?
The stamp duty holiday, which was announced on 8 July and will run until 21 March 2021, saved existing homeowners an average of £5,000.
But legal fees and estate agents’ fees, which are charged as a percentage of a property’s value, both increased as house prices rose.
Estate agents’ fees were 14% more expensive than before the stamp duty holiday was announced at an average of £3,936, while legal fees increased by 15% to £1,682.
There was also a 10% increase in the cost of a survey, raising it to £450, and a 3% rise in removals expenses to £546.
The only cost that was unchanged was the price of an Energy Performance Certificate at £55.
Who does it affect?
Unsurprisingly, moving costs vary significantly across the UK.
London is the most expensive place in which to trade up the property ladder, with the associated costs averaging £12,061, although this total is less than half the £25,255 paid before the stamp duty holiday.
The South East is the second most expensive place in which to move home at £7,457, followed by the South West at £6,640.
At the other end of the scale, moving costs in Northern Ireland average just £4,356, only £1,085 less than before the stamp duty holiday was introduced, while in the North East they are £4,659, a reduction of only £958.
What’s the background?
While existing homeowners saw their moving costs fall, first-time buyers, who were already exempt from paying stamp duty on the first £300,000 of a property purchase, saw their moving costs increase.
The typical first-time buyer now spends an average of £1,795 on the associated costs of moving, 8% more than before the stamp duty holiday was announced.
Moving costs for people purchasing their first home have risen in all regions of the country except London, where they fell from £6,730 to £2,218, and the West Midlands where they dropped by £42 to average £1,520.
Unsurprisingly, London has the highest moving costs for first-time buyers, while Scotland has the lowest at an average of £1,199.
Top three takeaways
The cost of moving home has dived by 39% due to the stamp duty holiday, saving buyers an average of more than £4,200
The typical person trading up the property ladder now spends £6,669 on associated costs, down from £10,911 before the stamp duty holiday
The fall in stamp duty costs more than offset increases in the amount people paid for other services, such as legal fees, estate agents’ fees, surveys and removals.
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