Cash Savings for moving house

[rootsandwings89]

How much cash savings is needed before moving house?

Looking to put our first home on the market next year and buy a bigger place. House has about £30k equity, but we have just cleared our credit cards and loans so starting our savings from scratch again!

The bare minimum you'll need in cash is the uphold legal and search fees, the surveyor's/valuation fee plus enough to pay the removal men so potentially around £1k - £2k, theoretically everything else can be paid for out of any profit from the sale of the previous property, deposit on new house, mortgage fees, stamp duty, legal fees, estate agents commission, any redecorating or renovations and new furniture for the new place. However I would say that as you are looking to buy a bigger (and presumably more expensive place) that must mean you're already looking to take a bigger mortgage? In which case depending on exactly the sums involved I would definitely recommend waiting until you have more of a financial cushion, probably more like at least £5k -£10k as you definitely do not want to go back into credit card debt or overstretch yourself and be unable to pay the mortgage. If you can post the approximate values of your current house and intended purchase we could work out what your costs are likely to be more accurately, plus it would be useful to know (roughly) your current household income...

So we bought our house for £230K, the equity is actually around £50-60K (not £30k).

we can borrow up up £400K and the houses we’re looking at are around £350-400k. Ideally we don’t want to stretch ourselves too much on the monthly payments.

Too many variables. Like a PP says, there's only part of the cost that has to be paid by you and the rest gets covered by your larger mortgage.

But it sounds like a good time to completely overhaul your budget to take into account a new larger mortgage and also if your new house has higher bills and if any other costs will change, eg closer or further away from work/school etc so different transport costs.

If as a minimum, you start living as if you're in the new house already and save the difference between your current mortgage/bills and what your next house will cost you, you'll naturally build up savings while at the same time see how the new budget feels (also don't forget to put money aside for annual and irregular expenses separately, which are not 'savings' as such as it's part of your budget that's not been spent yet. Doing this will help you stay out of debt in future as you'll have money to pay for whatever it was that the cards and loans were used for).

I would allow £2.5K for the legal fees (purchase and sale) £1K for removals if you're going to pack yourselves (less if you're going to hire a van and do the move yourselves), £500 for a survey and then calculate what SDLT (stamp duty) is likely to be on your onward purchase. If you purchase for £400K this will be £10K. I would then add a bit for any incidentals so probably round up to £15K. This means you can use all the equity you have towards your onward purchase to keep your mortgage at a manageable level.

I would then want a minimum of another 5K for some initial works at the new property for example if they take all the curtains and you need to replace, if you need new furniture as yours doesn't fit or you're upsizing and don't have enough etc...

I am a cautious person but definitely wouldn't start the process of moving without at least £20K in savings.

We set aside £20k for moving, the biggest part of this was the stamp duty, about £5k of it was for the moving legals, we budgeted for doing searches and surveys on more than one property too.

Did you save all of that before moving or did some of your equity go towards it?

We had it in savings before moving. Due to circumstances, both me and my partner in new careers, when we bought our first house we went smaller than we could afford so that if either of our jobs didn't work out we could survive on one wage. It meant that when we came to buy our next house we had quite a bit of savings

We moved from our first place, and completed last month. The biggest hit to the budget is places don't sell for their valuation price, especially now in a buyers market. We were valued at £220k and sold for £180k. The house we bought had a discount so it didn't matter, but it reduced money available for the next deposit and fees

Its ok using your equity for some of the fees but obviously you need your equity for your deposit in the new place... You say you have £50k equity and your looking to buy a house worth £400k (using worse case amounts youve quoted). That means your need £40k for a 10% deposit. As a PP said say it doesnt sell for what you think it will and your equity is only £45k that only leaves £5k left which TBH you will need when you move as I guarantee there is things you will need / want to change but that wont be obvious at the viewing and will only become evident once youve moved in. A new boiler for instance will wipe out most of the £5k straight away.

Ball part figure you need approx £20k in cash savings before putting it on the market (£10k stamp duty / EA fees for selling around my area is £2.5k fixed but some places do % of property price, Solicitors Fees to Sell & Buy approx £5k, Surveys etc qnd your easily around the £20k mark.