Fri, 21 Apr 06
Higher rates of stamp duty have led to a sharp rise in the cost of moving to the most expensive properties, according to the Woolwich, the mortgage arm of Barclays.
And the lender’s cost of moving home survey 2006 showed the higher up the housing ladder homeowners went, the sharper was the rise in costs.
However, for the average homeowner, the cost of moving has risen more slowly than house prices since the beginning of the millennium, said the report.
For those on the lower rungs of the property ladder, the cost of moving from an average terraced home priced at £149,906 to a semi-detached of £174,744 is £5,304 in England and Wales.
In 2000 home movers paid £3,333 to move from the same type of home, that’s an increase of 59% compared to house price growth of 95% on these types of homes.
But the costs are up dramatically the further up the ladder home movers go. Moving from an average semi valued at £174,744 to a detached home worth £293,248 costs a massive £12,535 today compared to £4,535 in 2000 (an average detached property cost £161,086 in 2000). That’s an increase in fees of 176% compared to house price growth of 70%. This can be largely attributed to detached properties having gone through the government’s 3% stamp duty threshold set at £250,000.
Andy Gray, head of mortgages for the Woolwich said: "Contrary to popular opinion the increase in moving fees since the start of the decade for people on the lower rungs of the property ladder has not kept pace with house price inflation, and therefore should not be putting them off getting on the property ladder or taking the next step up."
"Competition amongst solicitors and estate agents has increased as the less buoyant market has meant less business to chase."
However, it’s at the top end of the market that people are getting unsettled by headline numbers like £25,000 to move up from a semi to a detached. "At these levels people are thinking seriously about extending or converting a basement or loft which can be more cost effective than moving," said Mr Gray.
The survey, which started in 1994, includes solicitors, estate agents, land registry and search fees as well as stamp duties but excludes moving firms' charges and surveys.
It also found that that last year solicitors fees have dropped by 1% while estate agents have raised their charges by 1%
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