Higher house prices and stamp duty mean the cost of moving home in London has risen to £32,092 or 47% higher than a decade ago.
The latest report by Lloyds Bank shows the average cost for home movers buying a new property is £11,624 or a rise of 5.7% over the last year at a time when average earnings are up by only 2%.
This expense homeowners must pay includes stamp duty, estate agency, surveyors, home removal and conveyancing costs.
In London the cost is even higher due to higher house prices at £32,092, three times higher than the national average and the cost of moving has increased 47% or £10,225 in the past decade.
First time buyers can avoid some of the expenses paid by home movers such as estate agency, home removal and often reduced stamp duty costs.
There are significant regional differences
There are significant differences in the total amount homeowners pay to move home and the change in costs over the last year as shown in the following table produced by the Lloyds Bank research.
| Region | 1 year change |
Moving cost |
|---|---|---|
| London | 2% | £32,092 |
| South East | 6% | £21,373 |
| South West | 21% | £13,443 |
| East Anglia | 18% | £12,909 |
| West Midlands | 2% | £10,044 |
| East Midlands | 13% | £9,460 |
| North West | 8% | £8,092 |
| Wales | 6% | £8,008 |
| Yorks and the Humber | -1% | £7,623 |
| North East | -8% | £6,539 |
| Scotland | -8% | £6,418 |
| Northern Ireland | 14% | £6,131 |
The national average cost of moving home £11,624 disguises significant regional differences with the cost in Northern Ireland as low as £6,131, Scotland costing £6,418 and the North East £6,539.
This compares to London where home movers pay an average of £32,092 or the South East second most expensive with £21,373.
Andrew Mason, mortgages product director at Lloyds Bank said, The cost involved when moving home has continued to rise over the past year, making it even more difficult.
The combination of both higher property prices, and the rapid increase in those prices in recent years, results in significantly higher moving costs, says Mr Mason.
There have also been large changes over the last year with the cost of moving in the South West rising 21% or £2,345, four times the national increase of £628.
Costs have reduced in other regions such as the North East falling -8% or -£594 less to move and Scotland also down -8% or -£529 less for moving home and reflects property price differences in these areas compared to the rest of the UK.
Moving costs increase to a third of earnings
The total cost of moving in the UK has increased by £2,029 or 21% in the past ten years from £9,595 in 2007 to £11,624 today.
Data from Lloyds Bank shows the total cost of moving has risen to 34% as a percentage of gross annual earnings in the past ten years.
Of the £11,624 moving cost over half is due to stamp duty land tax (SDLT) rising by £393 or 16% to £2,897 as shown in the table below.
| Moving cost | Cost 2017 | 1 year % change |
|---|---|---|
| Stamp duty | £2,897 | 16% |
| Estate agency | £5,571 | 3% |
| Surveyors | £665 | 0% |
| Home removal | £1,141 | 3% |
| Conveyancing | £1,290 | 3% |
| EPC | £60 | 0% |
Moving costs in London are almost three times more than for the UK as a whole at £32,092 paying significantly more on stamp duty.
For older remortgage buyers that are required to repay their loan by the lender, rather than downsizing and paying stamp duty tax they can agree a lifetime mortgage.
The average home mover in the capital pays just under £16,000 in stamp duty and over £11,000 in estate agency fees whereas for the national average this is reversed.
These higher costs may deter homeowners from moving in the first place and equity release mortgage buyers can access wealth in their properties for home and garden improvements.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living or even buy a more expensive home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, equity release calculator and property value tracker chart.
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