House buyers unprepared for cost of moving

House buyers unprepared for cost of moving

More than 40 per cent of home buyers are not prepared for the extra costs involved in moving house, according to new research.

A study by OnePoll, carried out among 2,000 adults who had moved in the last ten years, found the average bill for unexpected costs was £3,823.88 and included legal fees, surveying costs and general removal and redecorating bills.

The biggest cost for movers were legal fees, which came to an average of £1614.27.

Article continues after advert

But the research, carried out in March, found at least a third of those surveyed had to borrow money to cover the unforeseen costs.

Half turned to friends and family for funding, one third relied on their credit card and a further 27 per cent took out a bank loan to cover the unexpected cost.

Tom Newbould, from online lender MYJAR which commissioned the research, said: "The study shows just how much goes into moving house, from the task of cleaning the current home, to surveying the new house.

"Every pound adds up, resulting in what is clearly an unanticipated extra amount for homeowners to pay, showing perhaps a lack of knowledge around the true cost of moving.

"Not every buyer will find this extra cost easy to fund so it’s important to plan ahead and ensure you’re not left in a difficult position money-wise. Finances always need careful consideration and planning.

"Big costs and commitments like these most certainly require a degree of financial education as a background, and people may lack this."

David Hollingworth, associate director at L&C Mortgages, said this was one of the areas where advisers added value.

He said: "It’s important that home-movers and first-time buyers budget carefully to ensure that they have earmarked adequate funds toward the ancillary costs of buying, including legal costs, survey and removal costs plus stamp duty where applicable.

"That is essential in helping determine the size of mortgage that will be required and how much of their savings can be allocated to the deposit. In addition they need to keep some cash aside as a rainy day fund, just in case there are unforeseen circumstances.

"A mortgage adviser is likely to be of help to a borrower in understanding what they may need to budget for and help avoid any last minute hurdles."