How Much Does it Cost to Sell a House in South London?

15.08.2022

It can be an expensive business if you are considering selling a house in Croydon, Lambeth, Wandsworth or anywhere in South London. Several costs and expenses are involved, from paying the estate agent to Capital Gains Tax (CGT) obligations.

In this guide, we will consider the key associated costs so that you can budget, calculate your profit and understand what’s involved when selling a house in South London.

The average property sale price in South London in 2021 was £599,451, similar to 2020 but up 10% on 2019 prices. Therefore, now is currently a good time to look at selling a property you own.

Most sold property types were flats, and the most expensive area inside South London was Lambeth, with the least expensive area being Croydon.

How much will it cost to sell a property in South London?

You may have a rough idea of the costs involved in selling a house and what final profit you will eventually be left with once the sale goes through.

However, it can be easy to forget some of the hidden fees you will face throughout the process, which can be higher when you live in London.

We look at all the typical costs you can expect to pay. They are important to consider before you decide to sell your house.

Energy Performance Certificates (EPC)

An Energy Performance Certificate (EPC) is a compulsory document you must have before putting your property on the market.

An inspection is carried out on the property by a certified specialist assessor to produce a report. This energy report summarises the property’s overall energy efficiency, what the energy costs are at the property and most importantly, several efficiency recommendations on how they can be reduced.

You can either organise a company to carry out the inspection or speak to an estate agent who will be able to arrange it on your behalf. An EPF will typically cost you around £35-£120, depending on the location and size of the property.

Costs to prepare your house for sale

Once you have decided to sell your South London house, you need to consider whether it is in an appropriate state and presentable for viewings. It may just need a lick of paint and a tidy up which may cost just a few hundred pounds.

However, if unfinished renovation projects or major upgrades are needed, such as a new kitchen or bathroom to bring it up to a modern standard, it will cost you a lot more.

You should plan any significant improvements before deciding to sell and factor these into the total costs of selling your house.

Estate Agent Fees

Whilst it is possible to sell your house privately yourself, it is more common and much easier to use an estate agent.

The fees involved with using an estate agent will usually vary depending on the property’s final selling price. Fees vary between agents but typically range from 1% to 3% of the sale price. However, some agents offer fixed fees.

For example, if you are selling a house in Balham in the London borough of Wandsworth and the property sold for £549,000, then based on an estate agent fee of 2%, you would have to pay the agent £10,980 +vat out of the final sale price.

In addition to their fee, you will also need to pay Value Added Tax (VAT). You should speak to several estate agents and shop around for the best deal.

The benefit of using an estate agent is that they will have a deep understanding of the local property market in your area. Therefore, they can provide a range of advice to help you sell quickly and efficiently and also help you realise the property’s true value.

Some of the other services they will provide include:

  • Book and arrange viewings
  • Listing and marketing the property
  • Managing the process and all paperwork
  • Speak to all enquiries to answer any questions
  • Taking quality images of the property

Conveyancing Solicitor Fees

When selling your property, certain legal aspects need to be completed. To do this, you will need assistance from a professional property solicitor (conveyancer) who can take care of everything.

The quality and cost of this service can vary, so it is best to speak to several firms to compare what you get for your money.

Some conveyancing firms work on a fixed fee, and others charge you a certain percentage of the property’s value. The fee is usually made up of the legal fees plus disbursements. The selling fees are generally less than when you purchase a property. However, it depends on whether you still have a mortgage and whether it is freehold or leasehold.

An example calculation below is for a freehold property in Clapham that costs £800,000 and with an existing mortgage.

Sale Conveyancing Costs:

Fixed Legal Fees

  • Total Legal Fees (inc. VAT): £1,009.20
  • Other fees – Solicitor Disbursements
  • ID Check Fee (£8/£25 Per person): £8.00
  • Office Entries Fee: £6.00
  • Lawyer Check Fee: £16.50
  • Total Solicitor Disbursements: £30.50

Upfront Disbursements

  • No Completion, No Fee Guarantee: £50.00
  • VAT: £10
  • Total Upfront Disbursements (inc. VAT): £60.00

Total = £1,099.70

Mortgage Charges

Most people will still have some mortgage left to pay on the property when they decide to sell. Even though you may be buying another property, you will still pay off the mortgage with your current lender, which could trigger an early repayment charge and admin fees.

It is worth speaking to your lender first to find out how much the charge could be as it can sometimes be much higher than expected and another cost you need to budget for in your calculations.

Lenders’ fees vary massively and usually range from 1-5%, which can add up to a considerable amount if you still have a large mortgage left to pay off.

Capital Gains Tax (CGT)

If you are selling a second home, investment property or one you inherited, then 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 (property, stocks etc).

The amount of tax you pay will depend on the profit you make on the sale. No CGT will be due if you sell your main residence and move to another house.

Any estate agency fees can be deducted from the calculated profit, and there is also a personal allowance and threshold of £12,300 per person, which can be combined if two people own the house.

Removal costs

The final cost to consider when selling a property and moving on to another is the removal fees.

Some people manage to hire a van and do it themselves, often with the help of friends. However, if you have a lot of stuff, it is usually easier and less stressful to hire a professional removal company.

Prices can vary widely from £800 to over £1500. It will depend on how much furniture and stuff you have accumulated and the distance you are moving, so do shop around for the best quotes.

How to calculate profit when selling a house?

To work out the net profit from selling your house, you need to keep track of all your costs and do some simple maths.

1. Record the final sold price.

2. During the process, you should list down all of the associated costs and expenses discussed above.

3. The total profit made from selling your house will be the difference after subtracting all the transactional costs, fees and any mortgage balance from your total property sale price.

There are a lot of costs to consider when putting your house on the market to sell, which can build up to be more than you expected.

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Source

https://www.rightmove.co.uk/house-prices-in-South-London.html