The average cost of moving house in the UK has increased by 9% or £870 over the past year to almost £11,000, according to new research.
However, for those in the Greater London area it has increased by £4,732 or 18% over the past year, more than five times the national increase.
The figures from Lloyds Bank also show that in the last decade the total cost of moving nationally has increased by £2,206 or 25%.
It points out that the annual increase to £10,996 is well above the 0.5% increase in the consumer price index and annual growth in average earnings of 1.5%.
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 or 8% to £5,404 in 2016. Average stamp duty costs have increased by £372 or 7% to £2,504 and legal costs are up by £93 or 8% to an average of £1,251.
The figure differs widely, however, across regions, which largely reflect local property price trends. The larger increase in Greater London is down to the fact that 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 home mover 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 at 72% against 32%.
‘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,’ said Mike Songer, mortgage director at Lloyds Bank.
‘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,’ he explained.
A breakdown of the figures shows that the South East is the second most expensive region for moving, with an average outlay of £20,210, a rise of £3,382 or 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 of 1% and Scotland 2%.
Northern Ireland has the lowest moving costs, at £5,401, some 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 25% rise in the cost of moving in the past 10 years from £8,790 in 2006 to £10,996 today is in line with the percentage growth in average house prices over the decade. Average gross annual full time earnings have increased by less, some 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 or 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 or 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.
Source: PropertyWire 20th September 2016