Post Office Money’s Cost of Moving study, compiled by the Centre for Economics and Business Research (Cebr) has found that both renters and buyers are using the majority of their cashable savings to cover the cost of moving.
Renters need to have an average of £1,469 saved to cover the costs of moving including the security deposit (£944) and moving costs (£525) and on average have £1,522 in cashable assets available to them. However, 53 per cent of 22 to 29-year-olds saved no money in a savings account, so many young renters will have no savings set aside to cover these costs at all.
Buyers, meanwhile, will need to budget an additional £10,132 to move home, with estate agent fees making up a third (33 per cent) of that cost (£4,815). However, 80% of prospective home buyers underestimate the additional costs of moving, budgeting for less than half of the actual cost on average (£6,782 of £10,132) which could see them dip into their savings.
The cost of moving has increased by 25% for a home buyer and 13% for renters over the past decade. However, upcoming changes such as those made in previous Budget announcements by the Chancellor, may see costs ease for both buyers and renters
Cost of moving as a renter
Moving can place significant financial pressure on renters, with deposits accounting the bulk of the cost of moving as a renter (64%), £944 on average, ranging from £1,629 in London to £526 in the North East. While renters will expect to see these costs refunded at the end of their tenancy, they will likely need to wait until after they have moved out to recoup the cost. As such, renters who do not want to deplete their savings will need to set money aside specifically for their next deposit in order to make a move.
But there is some hope for renters, the Government has proposed a ban on letting agent fees under the Tenant Fees Bill, which is likely to come into effect in 2019. Agency fees make up a significant amount of the cost of moving as a renter (16% – £235).