The average cost of moving home has risen by £870 over the past year to £10,996, according to the latest research from Lloyds Bank.
This 9% rise is significantly above the 0.5% increase in the consumer price index and annual growth in average earnings of 1.5%.
Lloyds said rising house prices are the main factors behind the increase in moving costs, pushing up estate agency, stamp duty and conveyancing fees, which are all typically linked to the purchase price.
Higher estate agency fees account for more than half of the increase in average moving costs, which have risen by £402 (8%) to £5,404 in 2016. Average stamp duty costs have increased by £372 (17%) to £2,504 and legal costs are up by £93 (8%) to an average of £1,251.
The figure differs widely, however, across regions, which largely reflect local property price trends. Greater London has seen the average cost of moving increase more sharply over the past year – by £4,732 (18%), more than five times the national increase of £870. This is largely down to the fact that Greater London house prices have risen by 14.5% over the past year compared to the UK average of 8.5%.
The average moving cost in London stands at £31,416 – nearly three times the UK average – and the average homemover in the capital pays more than £15,000 in stamp duty and £11,000 in estate agency fees. The cost of moving in the capital equates to a substantially higher proportion of annual gross earnings than nationally: 72% against 32%.
Mike Songer, mortgage director at Lloyds Bank, said: “The cost of stepping up the housing ladder has continued to rise sharply over the past year. As a result, the cost of completing a home move in the UK has grown significantly over the past decade, to nearly £11,000.
“This trend is especially marked for buyers in London and the South East with the combination of both higher property prices and more rapid increase in prices in recent years resulting in significantly higher moving costs in these parts of the country.
“Lloyds Bank is committed to helping customers take their first or next step on the property ladder, and so earlier this year we launched a new ‘hassle free’ mortgage offer to help cover some of the initial costs for mortgage customers, such as purchase legals, valuation and mortgage and product fees.”
The South East is the second most expensive region for moving, with an average outlay of £20,210 – a rise of £3,382 (20%) since last year. At the other end of the spectrum, there has been virtually no change in Wales and only very small rises in the North West (1%) and Scotland (2%).
Northern Ireland has the lowest moving costs, at £5,401 (18% of local annual average earnings), whilst moving costs are between £6,900 and £8,000 in Yorkshire and the Humber, the North East, Scotland, the North West and Wales.
Nationally, the total cost of moving has increased by £2,206 (25%) in the past ten years from £8,790 in 2006 to £10,996 today. This is in line with the percentage growth in average house prices over the decade. Average gross annual full time earnings have increased by less – 17% – over the same period. As a result, the total cost of moving has risen from 30% to 32% as a percentage of gross annual earnings.
Again, there have been substantial regional differences in moving cost trends. London has seen the highest rise in the cost of moving over the last decade, with a £12,680 (68%) increase from £18,736 to £31,416. This rise is substantially higher than in any other region with a £4,329 increase in the South East being the next highest. Moving costs have increased as a proportion of annual gross earnings in the capital from 46% in 2006 to 72% in 2016.
In sharp contrast, moving costs in Northern Ireland have fallen by £1,957 (27%) from £7,358 in 2006 to £5,401 in 2016 due to the dramatic decline in house prices in the country following the onset of the financial crisis in 2007. Moving costs in the North East and Wales are also slightly lower than a decade ago.
