Cost of moving home falls to lowest in 10 years after agents cut fees

The cost of moving home has fallen to its lowest level for a decade because estate agents are reducing their fees, the mortgage lender Woolwich reported yesterday.

Its research showed the cost of upgrading from a £150,000 home to a property worth £200,000 typically cost £5,523 last year. In 1993 the same transaction would have cost £7,378 in estate agents' and solicitors' fees, 25 per cent more.

The authors of the annual Cost of Moving Survey for England and Wales studied data from 1,350 solicitors and estate agents and estimated that commission charged by the latter had fallen by 45 per cent in the past decade.

Andy Gray, head of mortgages at Woolwich, said: "Contrary to popular perception the 25 per cent drop in house-moving fees over the past 10 years is largely because estate agents have dropped their fees by around 45 per cent. With house price inflation set to slow this year this could lead to increased competition among estate agents and less activity in the property market so we would expect these fees to reduce yet further."

Mr Gray said higher commissions were charged in 1993 to maximise profits from fewer transactions during a sluggish housing market. He also conceded that it had become common practice for some estate agents to offer reduced commission, otherwise charged at 1.5 to 2 per cent, if their clients signed up for financial services such as mortgages and home or contents insurance on which the agent earned a separate commission.

The figures for the cost of moving, compiled by the University of Greenwich, also include land registry fees, search fees and stamp duty, which has remained at 1 per cent in the past decade in the £60,001 to £250,000 price bracket. Researchers did not include the cost of a survey and removal.

The survey also revealed substantial regional variations in the cost of moving home. The cost of moving within London from a £150,000 to a £200,000 property is 13 per cent above the national average at £6,249. In north-west England, the cheapest region, it costs £4,785, 13 per cent less than the national average.

For transactions involving more expensive properties, the reduction in fees is more than offset by rises in stamp duty, which is levied at 3 per cent on the purchase of properties costing more than £250,000 and 4 per cent on those above £500,000.

Where the money goes

Cost of moving from £150,000 to £200,000 property:

Sale: Solicitor £553, estate agent £2,013

Purchase: Solicitor £637, land registry £150, searches £170, stamp duty £2,000

Total: £5,523