What Are the Costs for Selling Your Home?

What Are the Costs for Selling Your Home

Selling your home is a significant financial decision, and while you may be focused on achieving the best sale price, it's important to be aware of the costs involved in the process. From estate agent fees to legal expenses, various charges can add up quickly. To help you budget effectively, we’ve outlined the main costs you’ll encounter when selling your home in the UK.

1. Estate Agent Fees

Estate agent fees are typically the largest cost associated with selling your property. These fees can vary depending on the type of service and whether you choose a traditional high street agent or an online alternative.

Most typical estate agents charge a commission based on a percentage of the sale price, usually between 1% and 1.25% plus VAT, accept on lower value properties where you usually pay a minimum fee of around £2,000 - £2,500 plus VAT can be the norm. The fee often covers valuation, marketing, viewings, and negotiating offers on your behalf.

2. Conveyancing Fees

Conveyancing is the legal process of transferring ownership from you to the buyer, and you’ll need a solicitor or licensed conveyancer to handle this.

Solicitor’s Fees & Searches - The cost of conveyancing typically ranges from £800 to £2,000, depending on the complexity of the sale and the location of your property. The fee may also include charges for tasks like managing the exchange of contracts, liaising with the buyer’s solicitor, and handling the transfer of funds.

3. Energy Performance Certificate (EPC)

An Energy Performance Certificate (EPC) is a legal requirement when selling a property in the UK, except for Listed properties. It rates the energy efficiency of your home and is valid for 10 years. The cost of obtaining an EPC ranges from £99 to £200, depending on the size and location of your property.

4. Mortgage Exit Fees

If you still have an outstanding mortgage on your property, selling your home might trigger early repayment charges or exit fees from your lender.

Early Repayment Charges (ERC) - If you’re within a fixed-term mortgage and decide to pay it off early due to selling, your lender may charge an early repayment fee. This can be anywhere from 1% to 5% of the remaining mortgage balance, depending on how long you have left on the fixed term.

Mortgage Exit Fees - Lenders may also charge a mortgage exit fee (also known as a deed release fee), which typically ranges from £50 to £300. This fee covers the administrative cost of closing your mortgage account.

5. Home Improvements and Staging

To attract buyers and achieve the best sale price, you might choose to make some home improvements or stage your property for viewings.

Minor Repairs and Refreshments - Small fixes such as painting, repairing leaky taps, or improving curb appeal can make a big difference. Costs will vary depending on the work required, but it’s common to spend anywhere from £500 to £2,000 on touch-ups.

Home Staging - Professional home staging services can help make your property more appealing to potential buyers. Staging costs typically range from £500 to £2,500 or more, depending on the size of your home and the level of service required.

Tip: Even if you choose not to invest in professional staging, decluttering and cleaning your home thoroughly before viewings is essential.

6. Capital Gains Tax (CGT)

In most cases, you won’t have to pay Capital Gains Tax (CGT) when selling your main home due to Private Residence Relief. However, if the property is not your main residence (e.g., a second home or a rental property), you may be liable for CGT on any profit made from the sale.

Capital Gains Tax Rates - The amount of tax you pay will depend on the profit made from the sale and any allowable deductions.

Tip: The rate for CGT on property can vary and always consult a tax advisor or accountant to determine your CGT liability and whether you qualify for any deductions.

7. Removal Costs

Once the sale is complete, you’ll need to factor in the cost of moving. Removal costs vary depending on the distance, volume of belongings, and whether you require packing services.

Professional Removals - Hiring a professional removal company can cost anywhere from £300 to £2,000 or more, depending on the size of your move and the distance involved. If you’re moving a long distance or have a large property, costs can be higher.

Self-Move Costs - If you prefer a DIY approach, you can rent a van, which typically costs between £100 and £300 per day, depending on the size of the van and the distance

8. Other Potential Costs

Leasehold Fees - If your property is leasehold, you may need to pay for a leasehold information pack from the freeholder, which can cost between £150 and £300.

Storage Fees - If there’s a gap between selling your home and moving into your new one, you may need to pay for storage. Storage units typically cost between £50 and £200 per month, depending on the size of the unit.

Surveys - While it’s typically the buyer’s responsibility to commission surveys, in some cases, sellers may choose to arrange a survey to speed up the process or address potential issues ahead of time. Surveys can cost between £300 and £1,500, depending on the type.

Conclusion

Selling your home in the UK involves various costs, from estate agent fees and conveyancing charges to potential mortgage exit fees and removal expenses. While it’s tempting to focus solely on the sale price, being aware of these costs will help you plan your budget effectively and avoid any financial surprises during the process.

By understanding and preparing for these expenses, you’ll be in a better position to make informed decisions and maximize the financial return from your home sale.