Moving costs increase inline with house prices

The average cost of moving home went up by 6% in 2013 according to the a report carried out by Lloyds Bank. The figure take into consideration stamp duty, estate agent fees, solicitors fees and removal costs.

Other costs include survey fees, arrangement fees and search fees etc. Costs also increase as house prices increase because the price of your home is often linked to legal fees. Agents fees are a percentage of the property value and so are some solicitors fees. Stamp duty is paid as a percentage of the purchase fees so the higher house prices go the higher moving costs are likely to be.

Londoners costs now top over £20,000

The average cost to a Londoner now can cost double the national average with Londoners now paying an average of £20,000. If you live outside of London in the south-east you can expect your moving costs to be in the region of £16,000.

The average Londoner buying home now has to pay stamp duty of around £10,000 and legal fees of £6,500. This means that the moving costs for a Londoner now equates to nearly 47% of the average wage. It is difficult to see how families on average incomes will ever be able to buy a home with prices at these levels.

Stamp duty threshold must be reviewed

There have been some calls from the industry to change stamp duty rules as the number pf tax collected is approaching record levels and nearly all transactions across London and the south-east pay a minimum of £7,500 in stamp duty. This is not what it was originally designed to do and it is time that the tax was reviewed and the threshold was increased to reduce the costs that first time buyers have to pay.

By moving the 3% threshold up from £350,000 to £500,000 most first time buyers would save at least £5,000 which is a considerable sum when you are trying to buy your first home. The fact that is is a tax is in my opinion unreasonable and the government should look to change it. Who knows perhaps the Chancellor is going to review it just before the next election. I am sure that this would be a vote winner particularly amongst first time buyers.