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Moving home costs one third of annual salary

Cost of buying a home goes down for first-time buyers but increases for sellers

When you’re buying a home, it’s easy to get caught up in what you’ll pay for a mortgage, but that’s not all you need to budget for. New data has revealed that the additional costs of buying a home now add up to a third of the average UK salary.

Research by comparison site Really Moving has found that between 2017 and 2018, the cost of buying a home increased by 6% to £9,812. That’s a third of the median UK salary, which currently stands at £29,588.

Cuts to stamp duty for first-time buyers, however, have meant that those buying their first home are now paying less than before.

Here, we take a look at the costs you’ll need to be prepared for when it comes to buying a home.

 


Cost of buying a house spikes for home movers

After the mortgage, stamp duty – a tiered tax you pay when buying a property over £125,000 in England or Northern Ireland – is the highest cost home movers will face. Buyers in Scotland pay land and buildings transaction tax (LBTT) and in Wales it’s land transaction tax (LTT).

According to Really Moving, stamp duty now accounts for almost half (46%) of the total cost of moving home. Existing homeowners now pay an average of £4,500 in stamp duty when moving to their next property – an annual increase of 11%.

The average fee paid for conveyancing, the legal work involved with buying and selling property, has also risen. In 2018, the average conveying cost for home movers was £1,497 – a 6% increase from £1,149 in 2017.

The table below shows how the average cost of moving house has changed for non-first-time buyers.

Costs for home movers 2018 2017 Change
Stamp duty £4,500 £4,050 +11%
Estate agent fees £2,880 £2,880 0%
Conveyancing £1,497 £1,417 +6%
Survey £400 £397 +1%
Removals £480 £480 0%
EPC £55 £55 0%
Total £9,812 £9,279 +6%

Source: ReallyMoving.com

First-time buyers pay less when buying a home

The picture is brighter for first-time buyers, who are now spending less on costs and fees than in the past. In 2018, the average cost fell 29%, from £2,559 to £1,809.

This is largely due to the fact that aspiring homeowners were given a helping hand in the 2017 Autumn Budget, when stamp duty was scrapped for first-time buyers purchasing properties worth up to £300,000.

In 2017, the average first-time buyer paid £800 in stamp duty, but this bill has now fallen to zero for most – significantly bringing down the total cost of buying your first home.

Costs for first-time buyers 2018 2017 Change
Stamp duty £0 £800 -100%
Estate agent fees £0 £0 0%
Conveyancing £929 £882 +5%
Survey £400 £397 +1%
Removals £480 £480 0%
EPC £0 £0 0%
Total £1,809 £2,559 -29%

Source: ReallyMoving.com

What goes into the cost of buying a home?

When you’re buying a home, there are several things you’ll need to budget for beyond the mortgage deposit. We’ve rounded up four key costs you’ll need to factor into the cost of buying a  home in the gallery below.

Get expert help with your home-buying finances

Whether you’re looking to take your first step on to the property ladder or moving to a new place, speaking to an independent mortgage broker can help you work out the best financial options for you.

*Updated 18/2/2019 *

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