The cost of selling your home in the UK is more expensive than many give it credit for. Although many UK residents will budget to cover the cost of the down payment and insurance, it’s easy to get lost in the hidden costs.
If you’re thinking of moving house, take careful consideration of the specific overheads that are often missed, like estate agent fees, conveyancing fees, and more.
Estate Agent Fees
It’s common for people to use estate agents to sell their homes. Estate agent fees can vary widely between 0.75% and 3.0% of the home’s selling price VAT depending on the contract. The average UK rate is around 1.2% VAT for a no sale, no fee sole agency agreement.
That means £3,000 (1.2%) of a £250,000 will go to the agent, and that’s not even including the 20% VAT fee. Keep in mind that what you give to the agent is money you already have, as it just comes out of the money you earned from selling your home. To know exactly how much you’ll need to give to your agent, use an online calculator to calculate the estate agent fee.
Online Agent Fees
Online agents are typically much, much cheaper because of their hands-off approach. While your home will receive fewer in-person showings and marketing unless you provide it, online estate agents charge a flat fee of £0-£999 unless you live in London. Agents have added hybrid packages to attract clients, which offer accompanied viewings and no sale no fee packages.
Early Repayment Charges
One high cost that could come with selling your home is early repayment charges, which happen if you move into a new property before paying off your mortgage. The amount you pay will change based on your remaining balance, but fees range between 3-5%. That could result in you paying thousands of pounds. However, you can port your mortgage to your new home.
Porting a mortgage means you transfer it to a new property. You’ll keep the product on your previous loan and keep the same lender, but you’ll need to re-apply. Don’t assume you’ll get approved by your lender; you still need to meet their affordability criteria to port successfully.
Removal Costs
Believe it or not, it can actually be more expensive to move without a company, although removal costs can sometimes scare off sellers. If you think about the amount of time and money you’ll waste on gas, packing, and food, you may think twice about hiring that removal company. On average, a small house costs £300, but companies will offer great discounts for bookings.
When speaking to a removal company, be specific on what you need to move. This way, you can estimate how much removing your furniture will cost, and you can prepare for the bill. If you need to clean out your home of rubbish or clean the space, that can add to your removal fee.
Conveyancing Fees
Conveyancing fees cover the amount you’ll pay on the legal side of your real estate transaction. They are typically split into two parts: disbursements (third party service charges) and legal fees (what the solicitor or conveyancer charges). The price of your conveyancing fee depends on your location, so if you live in London or another populated city, you’ll pay a pretty pence.
On average, a conveyancing fee will range between £850 and £1,500. The bulk of this money will come from main disbursements for the transfer of ownership and copies of the title deeds.
Energy Performance Certificate
To legally sell your home, you need to set up an appointment with an energy assessor to complete an Energy Performance Certificate (EPC). This includes how much energy a property uses and details on how to make the home or apartment cheaper and more efficient to run.
An EPC typically costs £80, and while that isn’t a significant expense, the size and location of your property, as well as the type of building you own, can make this transaction pricey. Not only that, but if your property receives anything less than a D rating, you’ll have to pay more to boost your letter grade up to a C, B, or A. If you get a G or F rating, you won’t be allowed to sell at all.
Home Improvement Costs
Besides any major repairs you’ll have to do; some estate agents will recommend basic home improvement options to better your chances of selling your home. While this will increase the desirability of your property and quicken its sale, you may need to spend thousands of pounds to do this. However, decluttering and a fresh coat of paint can go a long way to impress buyers.
