It can be an expensive business if you are considering selling a house in Wandsworth, Balham, Battersea, Clapham, or anywhere in South London. You may have a rough idea of the costs of selling a home, but it’s easy to forget the fees and taxes – like estate agent fees, mortgage fees, and Capital Gains Tax (CGT).
The average property price in South London in 2022 was £748,399, similar to 2021 but up 8% on 2020 prices. Flats were the most sold property type, attracting an average selling price of £569,803. London sellers can profit when they sell, but the outgoings can be considerable.
Our guide breaks down the key associated costs so you can calculate your profit and understand what’s involved when selling a house in South London.
Energy Performance Certificates (EPC)
An Energy Performance Certificate (EPC) is a compulsory document you must have before putting your property on the market. A certified specialist assessor inspects the property and produces a report summarising the property’s overall energy efficiency. It includes a grade between A (the most efficient) and G (the least efficient), estimated energy costs at the property, and suggested improvements.
You can engage a company to conduct the inspection or instruct your estate agent to arrange it on your behalf. An EPC will typically cost you around £35-£120, depending on the location and size of the property. Before spending money, find out if your property already has a valid energy performance certificate on gov.uk. The EPC is valid for ten years, so you may be able to use an existing certificate for your sale.
Costs to prepare your house for sale
Once you have decided to sell your South London house, consider whether it’s presentable for viewings. It may just need a lick of paint and a tidy-up, costing a few hundred pounds.
However, completing renovation projects or major upgrades costs a lot more. The expense of a new kitchen or bathroom may outstrip any boost in selling price. Plan any significant improvements carefully before deciding to sell, and factor these into the total costs of selling your house.
Estate Agent Fees
The estate agent fees for selling a house are linked to your property’s final sale price – online estate agent services offer an alternative, usually for a fixed fee. But using a high street estate agent is still the most common route. Here’s how much you can expect to spend on estate agent fees when you sell your South London property.
High Street Estate Agent Costs
High street estate agent fees are typically 1-3% of the final selling price plus Value Added Tax (VAT). For example, if you sell a house in Balham in the London Borough of Wandsworth for £549,000 with an estate agent fee of 2%, you must pay the agent £10,980 plus VAT from the final sale price.
HomeOwners Alliance research shows that 9 out of 10 home sellers choose high street estate agents. The benefit of using an estate agent is their deep understanding of the local property market in your area. This expertise can help you sell quickly and efficiently and realize the property’s true value. Some other services they will provide include:
– Taking quality images of the property and preparing marketing materials
– Listing and marketing the property
– Arranging and conducting viewings
– Managing the entire sales process through to completion
Online Estate Agent Costs
Most online estate agents charge an initial one-off fee upfront, often between £1,000 and £2,000, with additional services at an extra cost. They can be cheaper and may offer no sale, no fee deals, but you’ll work considerably harder.
Their representatives don’t necessarily have the inside track on your local property market and may not get involved in negotiation or back-and-forth communications between parties.
Typically, an online agent will offer:
– Basic photography and access to online portals
– Saving money by taking your own photos and writing your own listing
– Accompanied viewings for a cost
– Cost-cutting by conducting your own viewings and negotiations
Conveyancing Solicitor Fees
When selling your property, you will need a professional property solicitor (conveyancer) to handle the legal side. Their cost and quality can vary, so speak to several firms and compare value for money.
Some conveyancing firms work on a fixed fee, while others charge a percentage of the property’s value. The fee is usually made up of legal fees plus disbursements. The selling fees are generally less than when you purchase a property. Expect average conveyancing fees of £550 to £1,700 (inc. VAT), varying according to whether the property is freehold or leasehold or whether you have a mortgage.
Mortgage Charges
Most people will still have some mortgage left to pay on the property when they decide to sell. If you are selling to buy a new property, ask your lender about taking out a new mortgage or porting your existing product.
Porting your mortgage
Porting means transferring your existing mortgage deal to your new property, avoiding early repayment fees. But you’ll need to reapply under current criteria and pay for a property valuation. The lender may treat the additional borrowing as a new loan if the new property is more expensive.
Taking out a new mortgage
Even if you’re buying another property with the same lender, paying off the mortgage could trigger an early repayment charge, mortgage exit fees, and admin fees. However, you may secure a better deal if you’re on a standard variable rate.
Average admin fees are £0-300, with early repayment charges ranging from 1-5% – a considerable amount if you have a large mortgage left to pay off. Lenders’ fees vary massively, so talk to them directly.
Capital Gains Tax (CGT)
If you are selling a second home, investment property, or one you inherited, you will likely be liable for Capital Gains Tax (CGT). GCT is the tax you pay to the government for the financial gains you have made on certain assets, including property and stocks.
The amount of tax you pay will depend on the profit you make on the sale and your tax band. In 2023-34, basic rate taxpayers will pay 18% on residential property gains, rising to 28% for all higher tax bands. No CGT will be due if you sell your main residence and move to another house.
You can make these deductions to reduce your CGT bill:
– Estate agency fees
– Personal allowance and threshold of £6,000 per person (can be combined if two people are owners)
– Home improvements such as extensions
You can’t claim for routine maintenance, repainting, or interest on loans to purchase the house. Speak to an expert to ensure you don’t miss a payment – or a saving.
Removal costs
The final cost to consider when selling a property is the removal fees. Some people hire a van and do it themselves, often with the help of friends. However, if you have a lot of stuff, hiring a professional removal company is usually easier and less stressful.
Prices vary widely, typically from £800 to over £1500, depending on how much furniture and stuff you have and the distance you are moving. Shop around for the best quotes.
Can I reduce the total cost of selling my home?
Appoint an agent with good local knowledge and a strong track record with similar properties – and choose the right time of year to sell. Take care of repairs to show your property is worth its price tag, but don’t overspend. You may not recoup the costs.
How much will I get after selling my house?
How much you get from your house sale will depend on the final sale price and how much you spend on the sale process. First, record the selling price. Calculate estate agent fees and conveyancing solicitor fees, and list them along with associated selling costs and expenses – remember to include VAT. Subtract fixed costs and any mortgage balance and fees to work out the total you will receive from selling your house.
Are you considering selling your South London home? Talk it over with Rampton Baseley.