Tuesday, May 15, 2007
Category:
Home Improvements
The recent Cost of Moving Survey conducted by Woolwich has shown that many house sellers are saving on the cost of moving despite an increase in property prices by 11.1% over the last year. As a result of Home Information Packs (HIPs) becoming compulsory from June this year, savings are likely to be cancelled out.
With rising property prices, movers are keen to save money where they can. According to Andy Gray, head of mortgages for the Woolwich, sellers are using their strong position to drive down the costs of moving: “The market definitely favors sellers at the moment and the lack of property on the market is helping them negotiate deals with estate agents, and to a lesser degree solicitors, as agents are desperately trying to find enough good quality property to satisfy the increasing demand. As a result the cost of moving for sellers has decreased by approximately 10 per cent since last year - it now costs on average £4,666 to sell a home compared to £5,181 last year. We also expect the pressure to continue on fees as long as it stays a sellers market. Especially as the introduction of Home Information Packs in the summer will only add to the cost of selling a house.”
A HIP containing an energy assessment, searches, legal documents and optional home condition reports will be made compulsory from 1 June 2007. Industry estimates have suggested costs of around £400. According to the research, while 85 per cent of estate agents agree that this will increase the cost of moving, a very high 77 per cent don’t believe that it will improve the house buying process at all.
Research has shown that HIPs will shift some of the costs of moving from buyers to sellers. However the impact for buyers is likely to go unnoticed this could be as a result of stamp duty contributing on average £9,750 to buyers’ costs. Buyers now pay out around £10,745 compared to £10,832 in 2006. The slight reduction is due to reduced solicitors’ fees which are currently down on average by 11%. Land Charge costs will come under HIPs from 1 June and this will further reduce the cost for buyers as the cost is transferred to sellers under the HIPs process. The reduced cost to buyers to an average of £10,545.
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With properties selling quicker than ever, almost one in five are selling in less than a month compared to four per cent last year many homeowners could consider taking advantage of a
home improvement loan. A secured loan, one of the many options available, could allow for homeowners to spruce up their houses rather than move. Small improvements like repainting living and dining rooms could be paid for using a personal loan and could add value to a property. Adding an extra bedroom or modernizing an existing bathroom might also be on the cards, improving your current property. A secured loan can be paid over a term to suit the borrower from 5 to 25 years.
