Cost Of Moving House 'Up 69%' In A Decade, Lloyds TSB Says
The cost of moving house has risen at a faster rate than house prices have themselves over the last decade, a study has suggested.
Since 2001, the typical cost of moving for someone who already owns a home rose by 69% or £3,632 to nearly £9,000 last year, steeper than the 64% rise in house prices over the same period to reach just over £160,000 on average, Lloyds TSB said.
The moving expense is at its highest level since the peak of the housing market in 2007, with estate agency fees, mortgage fees and stamp duty being the biggest contributors to the increase.
The study said the increased moving costs were concerning at a time when transactions were low and the housing market was subdued.
Buyers could also face more problems trying to raise a mortgage this year as the Bank of England expects lenders to tighten their credit conditions amid the weak economic backdrop.
Mortgage arrangement fees have increased by 252% over the decade, averaging £1,076, according to Lloyds TSB, which used official statistics as well as a combination of surveys for the study.
The current stamp duty holiday for first-time buyers, due to end in March, has helped to keep their moving costs way below average levels, with this sector paying around £3,334 to move.
Suren Thiru, housing economist at Lloyds TSB, said: "With the costs associated with completing a home move in the UK rising substantially over the past decade, the task for those looking to move home has undoubtedly become more challenging.
"The significant rise in home moving costs is particularly concerning at a time when demand in the UK housing market is weak."
House moving costs equate to around 27% of average gross full-time earnings, up from 22% in 2001.
Researchers found that just over half of consumers (51%) expected to plunder their savings to cover the increased costs, compared with less than a quarter (24%) who were relying on the equity in their current home.
The cost of moving home in the South East has more than doubled, with the 132% rise over a decade being the steepest increase in any UK region, to average £16,637 in 2011.
Londoners pay the most to move house, costing them a typical £19,544, a 127% increase over 10 years.
People in Northern Ireland pay the least, and have also seen the slowest rise, a 24% increase over the decade to reach £5,527.
Here is how the cost of moving home adds up and the percentage change in fees from 2001:
- Estate agency, £3,377, 64%
- Mortgage arrangement, £1,076, 252%
- Stamp duty, £1,876, 64%
- Conveyancing, £938, 64%
- Home removal, £1,110, 38%
- Surveyors, £545, 35%
- Total cost of moving home, £8,922, 69%
A "generational divide" has emerged in the UK housing market, where older buyers will not sell their homes and younger buyers cannot afford them, according to separate research from HSBC. This divide is likely to prolong the stagnation in the market, the bank said.
The survey examined the buying intentions of both age groups, and found that among younger people who are not planning to buy houses in the next six months, nearly 30% could not fund the deposit, 15% were afraid that they would not get a mortgage and 14% were worried about their job prospects.