Research from Post Office Money estimates that the ‘additional costs’ of moving home, such as estate agent fees and conveyancing costs have increased by almost 60% since 2004 – compared with a 29.4% increase in the cost of living.
The study found that costs increased from £7,475 in 2004 to £11,894 by the end of 2014, increasing by 20% in the last year alone.
Meanwhile, Lloyds Bank have estimated a more modest average cost of moving home - rising by 5% to £8,689 in 2014 from £8,258 in 2013 according to their study. Lloyds says that in the ten years since 2004, the total cost of moving has increased by 15% (or £1,137), the same as the increase in house prices.
However the report shows that the cost of moving is now at its highest level since 2007, when it was £8,761. They attributed the increase in the past year of £431 to fees paid to estate agents and surveyors, both of which accounted for £386 of the total rise in moving costs.
These costs, combined with an increase in home sales in the last year, mean that the total amount spent on moving has grown sharply by 15% in 2014.
The Post Office attributed the most significant moving cost over the past 10 years to the fee charged by estate agents, with costs jumping by 61% since the end of 2004 (from £3,229 to £5,214 in 2014) compared with a 39% increase in house prices over the same period as estate agents seek to keep up with changing house prices.
Conveyancing costs and surveyors’ fees have increased by 37% (from £1,039 in 2004 to £1,419 in 2014), and 51% (from £402 in 2004 to £607 in 2014) respectively over the last decade.
But despite the cost of moving increasing, the majority (84%) of prospective home buyers are still underestimating the amount they will need to set aside. Those hoping to buy in the next three years expect to spend just £6,895 on moving costs – just over half (58%) of what they should actually be budgeting.
Those hoping to move in the South East have been hardest hit by these increases with costs jumping by 97% in the last 10 years (from £8,907 in 2004 to £16,510 in 2014). However, London remains the most expensive place to move home with an average cost of £27,946.
John Willcock, Head of Mortgages at Post Office Money, said:
“With prospective home buyers’ attention firmly fixed on saving for a deposit, the additional costs of moving can often come as an afterthought – particularly for first-time buyers who are taking their first steps on the property ladder. Although house prices may continue to rise there are steps buyers and movers can take to reduce the amount they pay on top of this. Planning ahead is essential and potential homebuyers should be setting aside savings specifically for these costs. These ‘add-ons’ should be considered as part of the overall cost of buying or moving home.
“Forecasts indicate that the cost of buying and moving will only continue to rise over the next five years. With research indicating that 84% of prospective homebuyers have underestimated how much they should budget for this, many potential home buyers could be left with surprising costs at a time when they are already financially stretched. The good news is the Government’s recent stamp duty reforms have relieved some of the financial pressure of buying and moving home, and by cutting the amount they pay for additional costs prospective buyers can ensure they’re spending as little as possible.
“We are keenly aware of the barriers that people can face when they are looking to purchase their first home or move further up the ladder. We always seek to provide solutions to the problems wherever we can, such as our new range of mortgages with cashback offers and some fee-free deals.”
Andy Hulme, Mortgages Director at Lloyds Bank, commented:
"With the cost of moving at its highest level since 2007, people struggling to cover the costs should look to make savings wherever they can. The recent changes in stamp duty should help buyers reduce their overall cost of moving, which can be a significant boost."
