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Moving house? Here's 8 ways to save money

Published: 09/02/2021

Moving out of a home is not a simple process, and there are often extra costs
Brits spend an extra £696 per home move on things like WiFi installations
Outstanding bills also hikes up costs - one in seven people have fallen behind

Moving home is often voted one of the most stressful things you can do - but this year, there are two added pressures. These are the rush to complete before the stamp duty holiday deadline, which expires on 31 March this year, and the complications caused by lockdown restrictions.

Since the stamp duty holiday was announced, people have been keen to take up the opportunity to save money as a result of this tax being temporarily scrapped for the portion of a home purchase under £500,000.

But in a rush to secure a home, buyers may overlook some expenses or make mistakes that could cost them even more money. Moving is not always fun and games. If you don't plan correctly, you could pay £700 in extras.

According to one study by Moneysupermarket last year, Britons could spend an additional £696 each time they move home - and that is on top of common fees like agency fees, legal fees and stamp duty.

Here we highlight eight financial pitfalls to be aware of before and during your new home purchase and actions you can take now to avoid them.

1. You may not be getting the best mortgage deal

The economic issues caused by Covid-19 have resulted in a decrease in the range of mortgage offers available to buyers.

As mortgage providers have become less generous with their loan-to-value offers, buyers have had to put down bigger deposits to make it on to the property ladder.

Action to take now: It's important to research different mortgage opportunities to find the best deal for you.

Although an additional cost, using a mortgage broker takes away the hard work of finding the best offer for you and can often get you a better rate than going directly to the lender.
 
When it comes to an end of tenancy clean, you could do it yourself. But if the clean is not up to the standard required, a landlord could hire someone and make you pay for it.


2. Additional costs and fees

The personal finance comparison website, Nerdwallet warns of extra costs that could be incurred in the house-buying process.

They point out that a solicitor's fees to carry out the required legal work can range between £800 and £1,500, while searches to determine if there are any local issues or plans to be aware of can average between £200 and £300.

Land registry fees should also be a consideration. These can vary as the calculations are based on the value of the property.

Moneysupermarket says that extra costs could arise from paying for WiFi installation, changing bill providers, and paying for the post to be redirected.

Action to take now: Contact all the service providers involved in purchasing your home and find out what you're in for financially - especially if you need to switch providers. Find out if there are any exit or penalty fees involved from your current provider.

Nerdwallet says: 'It is also important to be aware that many of these fees, for example, solicitor or search charges, are non-refundable, even if the purchase ends up falling through. Therefore, it is crucial to be fully aware of all the costs involved before starting the process of buying a home.'

3. Furnishing the home


Many renters forget to factor in the cost of buying new appliances

Many renters have to buy new furniture when they buy a house, often because the home they're renting comes fully furnished or has in-built appliances. Forgetting to budget for furnishings you don't already have is a common mistake.

Actions to take now: To save money, you can always buy used furniture and appliances by scouring Facebook marketplace, Gumtree and Freecycle for deals.

Charity shops are always a good source of clean second-hand goods - they won't do electrical stuff but it's worth a check.

Ask family and friends.

4. Cleaning

You could lose money from your rental deposit if you don't get your rental home cleaned up to the standard required when you move out.

While hiring a cleaning professional can be expensive, it could save money in the long run.

It is worth bearing in mind that if you miss something (washing machines and ovens are common omissions) or the cleaning is not up to a professional standard, then your landlord will likely hire in a professional cleaner. You will be charged for the full property regardless of the hours you have put in, so it may be worth just paying up.

Action to take now: Find the right company for the job of cleaning your home.

It is always worth hiring a cleaner that guarantees their work; that way if the landlord flags something as unsatisfactory, you can contact the cleaner to go back in and resolve it.

5. Paying for damages to rental properties

When tenants move out, they typically expect to receive their full deposits back before they leave. However, the cost to repair damages could be taken off the deposit.

If the damage made by previous tenants was not documented, you could be held responsible for that, too.

If you leave it to your landlord or a letting agent fix it, they may add on a mark-up and/or admin charges to make restorations.

Action to take now: Check your tenancy contract to determine what constitutes fair wear and tear and what would be considered wilful damage. Tenants are not liable for fair wear and tear.

Minor scuffs and scratches would fall under wear and tear. However, holes in the walls from paintings that were hung up that require plaster, filling and painting would be considered wilful damage.

Renters moving out of a property should consider fixing any 'significant damages' themselves. This includes wall, door, ceiling & furniture damage.

If you leave it to your landlord or a letting agent to fix it, they may add on a mark-up or admin charges to make restorations. It's far cheaper to source your contractor or handyman if one is required.

In some cases, you could save money by hiring one company to do all the work: When selecting a cleaning company, look out for those that also offer small repair services. You may be able to get a cheaper deal by choosing one company for both services to fix small damages to the property.

6. Outstanding bills

If you're behind on your bills, then you're not alone. According to Citizen's Advice, one in seven (14 percent) of people have fallen behind on essential bills – including energy, water, mobile phone and broadband bills, council tax, rent, or mortgage payments.

Action to take now: On the day you move out, take final meter readings. Photos are helpful to resolve any disputes.

You should contact utility suppliers and the council with the last date of your tenancy and final meter readings and give them a forwarding address to send final bills.

Make sure you settle these bills promptly as the last thing you need in your new home is a letter from a debt collection agency.

7. Professional removal costs

Removal costs range between £300 to £600 according to Moneyadviceservice.org. While you can save money by renting a van and doing it yourself, your insurance company may not allow this.

According to GoCompare Home Insurance, most home insurance policies (78 percent) that cover removals only do so if the contents have been packed and transported by a professional removal firm.

If you want to conduct the move yourself or hire a 'man with a van' that's not considered a professional, you could end up paying for any breakages yourself.


You could pay for a move yourself, but if you get professionals to help you move, you're more likely to be covered by your home insurer if anything breaks.

Action to take now: Check your home insurance policy before your move and if you're not covered for your DIY move, you could shop around for a better deal that would cover it.

Premiums are based on the postcode, the type of property, and the value of your belongings. While your current insurer may have offered the best deal on your old property, they might not be as competitive for your new home.

However, before committing to switch insurers, you should check your existing insurer's cancellation charges to ensure that these don't wipe out any potential savings.

8. Extra rent for breaching the contract


If you don't get the timing of your notice period for your rent correct, you may end up paying extra.

To avoid additional fees when giving notice, you'd need to abide by your tenancy agreement and the law.

Action to take now: Look at your tenancy agreement. Your tenancy agreement, if a fixed term, would usually include a break clause. For example, it may state after three months post the start of the tenancy, a one-month notice period is evoked.

As long as you abide by those terms, you shouldn't be charged additional fees. If you're in a fixed-term agreement with no break clause, you will need agreement from the landlord on what fees, if any, will be charged.

You may be required to pay rent, even if you move out, for the duration of the fixed term tenancy agreement.

If you don't have a break clause, you could get out of the agreement by helping the landlord find a replacement tenant.

The landlord will be far more willing to let you exit the property as their rental income isn't likely to be impacted. If there is no fixed term and you're on a periodic tenancy, then usually the minimum notice required is one month, subject to stipulations included in your agreement.

At Circa London, maximum trust is one of our foundational principles. We understand that moving home can be an emotionally demanding time, and finding the perfect property can take some trial and error. If you're thinking of buying a new home, contact our experienced Sales team on 020 3137 7877 or email info@circalondon.com who will go above and beyond to help you.



Source: This Is Money
, 9.2.21