Moving house, especially when relocating to a home you buy, is not an everyday occurrence – probably happening only once or twice during your lifetime. Naturally then, the particular steps leading to an efficient, financially responsible move are intimidating and unfamiliar. For the best outcomes, the process of buying and moving takes time and dedication, with specific attention to wide-ranging details. In fact, organization and management skills are prized assets during the hectic times leading up to a move and property purchase. Whether accounting for family logistics, hiring movers or registering kids for local schooling, the most successful movers are those willing to adapt and cover diverse duties required to carry-out relocation.
In addition to the myriad practical concerns surrounding your family’s move, money matters play a prominent role during the financially stressful period experienced by most home buyers. To avoid surprises during the course of moving house and acquiring property, it is important to understand the true cost of buying, selling and relocating.
Property Value and Purchase Price
Your home represents the investment of a lifetime. Your initial deposit and equity built-up by mortgage payments serves as an important personal savings account, which is tied to the value of your home. In principle, as long as property values hold steady or rise, your investment is protected. On the contrary, some home owners recently learned first-hand how temperamental real estate markets undermine personal financial health. In order to increase your chances of long term mortgage success and avoid vulnerability in shaky financial markets, it is important to recognize general economic trends as well as particular conditions influencing your local real estate market.
Value is a primary concern for home buyers, who are subject to forces beyond their control at times. Ideally, buyers new to market find an ample supply of affordable housing to select from combined with a favorable lending market from which to draw financing. Conditions marked by balanced supply and demand create stability and naturally regulate the price of housing. Recent examples show how conditions continually evolve, making it more important than ever to stay atop developments as you prepare to buy a home.
Interest is up among shoppers who are coming out in greater numbers to investigate home buys. But sales over the last several months show losses, overall. 2014 was a hard act to follow, in terms of rising home values, during which double digit growth was seen in property values. For first time buyers entering the market today, average purchase prices are down one percent. And though cooling somewhat compared to last year’s numbers, values are still trending upward for the year, by more than 5 per cent. The mixed bag of data illustrates a market that rewards informed buyers who are prepared to act quickly buying well-priced homes. And since financing terms are still reasonable, qualified buyers are in a strong position for landing deals.
Financing and Stamp Duty Land Tax add to the Total Tally
Most homes exceed the value of cash on hand, so buyers rely on long-term financing to cover the high cost of property. In addition to purchase price, interest and fees must be considered as part of the cost of each real estate transaction. Today’s lending market requires strong credit and a large deposit in order for applicants to qualify for top tier rates, but eligible buyers do find favorable financing that keeps costs low. It is entirely relative, so depending upon the length of repayment; you’ll likely cover tens of thousands of pounds in mortgage interest before satisfying your home purchase. Mortgage debt is a natural part of investing and residential stability, but it must be accounted for each month, for many years.
When you buy a property in the UK, taxes are due as a percentage of the purchase price of your home. Once taxed at a steady rate, the value of a home is now broken into various levels, which are taxed at individual rates. The first £125,000 of each residence, for example, qualifies for zero per cent rate, which escalates as a home’s value grows. Based on appraisals, you must account for the tax assigned to your property.
For relocating families with limited resources the cost of moving complicates the financial picture even further, as money is already stretched thin from buying. Organization and advanced planning help trim expenses for families on the move, but even the most frugal movers take on expenses along the way. Booking economical moving services and enlisting help from family and friends are key features of successful low-budget moving efforts, which also include comparison shopping and employer-funding, in some cases.
The total cost of moving house includes the price of a new home, but that is just the beginning for buyers who must also account for taxes, financing and the cost of relocating. And though cost cutting measures make home buying affordable, certain expenses are beyond your control. The key to success is accounting for the entire expense- of moving before setting-out, to anticipate obligations and budget accordingly.
Image credit: Sunset Removals