Ways to Save when Buying and Selling a Home 

Moving home can be an expensive time. Believe me I have been there and done it three times. My first house was in Essex, I bought a three-bedroom house, with my ex-partner for £200k in 2002 and sold it for £250k in 2005 (when we split up). I then bought a house by myself in Hertfordshire in 2005, a smaller 2-bedroom house for £165k. I lived here until 2009 and sold it for £172k (not much growth at this tough financial time). Then in 2009 I moved to my current house, bought for £222k, currently worth around £450k (we extended it during this time). We recently very nearly moved to a new build in Cambridgeshire, but struggled to sell our house so stayed put.  

During this process of buying houses we have researched buying both new builds and old houses. And have done things the cheaper way and the more expensive way. I want to share with you some great ways to cut back on the costs and how to save up for these expenses.

Ways to Save when Buying and Selling a Home 

The costs of selling a house

I am going to use an assumption here that you are selling a house for £250k.

Estate Agents Fees

If you have a house to sell you will need an estate agent to help with the sale of the house. Or maybe not! I have used traditional estate agents costing normally around 1% of the selling price and I have also used an online estate agent. The difference in price is huge. For a selling price of £250k, the estate agents fee would be £2,500. You are looking to pay an online agent around £5-600.

Or you could opt for a part-exchange which is an offer available with some new builds. This would mean a saving of the whole estate agents fee.

Potential to save £2,000 – £2,500

Legal Fees and Home Buyers Survey

Again, an area where you could employ a traditional high street solicitor or an online firm. Costs of using a traditional solicitor could cost around £800. You could save a few hundred using an online provider but beware this could slow the process down. And not to forget the Home Buyers Survey.

Potential to save £200

Moving Costs

The big question is how much stuff do you have? And should you pay to have a removal firm help you to move. The costs here are big, but the packing and moving of all your stuff is so stressful. Is it worth the potential £1,500 to £2,000 price tag?

Knowing the stress, we had in moving to a new house the last time and the unpacking in particular, I would have to say it is worth the money! Or of course, you could do it yourself and hire a big van to move all the stuff for £200!

Potential to save £1,500

The Costs of Buying a House

I am going to use an assumption here that you are buying a house for £350k.

Stamp Duty

Stamp duty rules are different for those who are first time buyers compared to those of us selling and buying another home. I always use the government calculator to work out the tax fee. The fee for buying a £350k house is £7,500. This is a difficult one to save money on.

Legal and Survey Fees for Purchase House

As per selling a house there are legal fees to pay and survey fees, checking the house you are buying is structurally sound. There are different levels of survey in terms of detail and cost, the older the house the more detailed a survey you should get. If you do opt to buy a new-build house, then a basic survey should suffice.

The potential cost here is around £1000, with not much potential to save unless you go for the basic survey. I would generally recommend getting the mid-level survey though! Through experience I have used the results from the survey to get extra money taken off the price of the house on exchange day.

Deposit for new house

The deposit you pay on the house you are buying will most likely depend on what equity you have in the house you are selling. It needs to be at least 5% of the value of the house and you will get a much better mortgage deal the more of a deposit you are able to contribute.

If you are buying a house for £350k then you are going to need a deposit of at least £17.5k for 5% and £35k for 10%.

The savings you could make moving to a new house based on these assumptions

If you went for the lower cost option for all these moving costs you would need around £6k. Or if you went for the more expensive options you would need £13.5k!! A huge difference in what you need to pay. These costs exclude the deposit value.

How to save up for the costs of moving

The decision is yours how much of these costs you want to pay for using the equity in the house you are selling. Most commonly the deposit and stamp duty fees, plus solicitor fees are taken from this equity balance. I have certainly covered the costs in this way. Barratt Homes have produced a brilliant guide on how to make smart savings in purchasing your new-build, you can read all about it here.

You might want to save up for the estate agents fees, moving costs and survey fees. Here are some simple ways to quickly save up £5,000.

Create a list of all your regular monthly spending and optimise

List everything that you spend each month and go through every bill to ensure you have the best deal. If you have been with the same energy, broadband, TV package, mobile phone or insurance provider for a few years I know you will be able to negotiate a better deal. If you haven’t changed any of these for a while you could be looking at monthly savings of hundreds.

Start a spending diary

Grab yourself a notebook and every day make a note of everything you have spent during the day. The action of writing down your spend makes you more mindful and you can reflect at the end of the day or end of the week how much you have spent and how necessary that spend was.

At the end of every month I add all my spending into a spreadsheet and allocate a category. And then compare my spending to previous months. Again, making me mindful of my spending. I am old school and like to do this myself using a spreadsheet but there are some great budgeting apps out there to help you and make things easier. Yolt is a great one that I use as well as my spreadsheets. 

sagaspendingdiary

Switch your grocery shopping

Something I repeat on my blog is to switch to supermarkets like Aldi. The savings to be made are huge. I saved myself £40 per week switching from Tesco to Aldi. The food is top quality, granted there is much less choice, but do you really need 10 different varieties of vanilla yoghurt?

Create a separate account to hold your savings.

At the end of each month when you have your savings from switching bills and spending less move that money to a separate pot. Some bank accounts allow you to create pots, that move money from your available spending balance. Starling is a good bank for this. Or create a whole new savings account (with a good interest rate) to hold your savings. Then your savings are out of sight and out of mind to spend.

Generate extra income

There are so many ways to generate extra income easily. You could de-clutter your house and sell unwanted items on Gumtree, eBay or Facebook marketplace. You could do some mystery shopping (sign up to Proinsight and review gyms and spas and get paid!). You could take part in panel research and be asked your views on new products that a brand is developing. You could even fill in surveys whilst sat watching the TV.

What if you need to save for a deposit as well?

If you are a first-time buyer, then you will also need to save enough money for a deposit as well.

Think about saving up for your deposit using the Help to Buy ISA where the government will give you a 25% bonus on top of your savings. Start off with £1200 lump sum, then add £200 per month up to a maximum of £12k. You will then receive a £3k bonus!

Another popular option is the Help to Buy scheme. This enables you to pay a lower deposit of 5%, and the government loans you up to 20% of the value of the house interest free. Then you can apply for 75% of the value of the house as a mortgage.

Taking all of this information into consideration it now feels much more affordable to move house or to become a home owner. It was one of the best financial decisions I ever made.

This is collaborative post with Barratt Homes.

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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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2 Responses

  1. Hi Lynn,
    Very good advice!
    In my experience the conveyancing fees have been around £1400, when buying.
    Also, don’t forget the extra 3% stamp duty land tax (SDLT) for those us that hold on to a property when purchasing another. I went through this process in the past few months. I will be writing a post about my experience, very soon…

    1. Oh yes, this post was just for those selling one property and moving to another. Conveyancing fees of £1400!! Wow, prices have gone up, or its not that bad in Hertfordshire! I look forward to reading your post about stamp duty land tax.

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