How to save on the big move

If rising prices tempt you to trade up, keep an eye on the costs. By Nic Cicutti
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House prices are rising fast, allowing some self-styled experts to promote residential property - once again - as the ultimate investment.

It may be, of course. But it is worth reminding ourselves of the terrible mess hundreds of thousands of people got themselves into a few years ago when they rashly set out to buy not two but just one home for themselves.

For most of us, a home is somewhere to live and no more. Equally, that should not prevent us from seeing the last few months' house price rises as a heaven-sent opportunity to make the move to that nicer home we promised ourselves years ago.

One major expense is sale and removal. A survey by Woolwich Building Society earlier this year found that the cost is 4.4 per cent of the average house price in Greater London, 3 per cent in the north of England or Wales and 4.8 per cent in the south west.

Selling a pounds 50,000 home will cost an average of pounds 1,350, including estate agency fees and solicitor's bills. Buyers pay pounds 740 by comparison. But by the time the asking price climbs to pounds 80,000, the cost of buying mounts to pounds 1,728, while selling it rises to pounds 1,964. This is largely because of the 1 per cent stamp duty levied on the full price of all property sales above pounds 60,000.

With bills mounting so rapidly, it makes sense to cut costs where possible. Woolwich offers the following tips to ensure you stay in the black.

* If you can, opt for a sole agency agreement with an estate agent to sell your home. The survey says that can save an average of pounds 650. Ask whether advertising is included in the fee.

* Check whether solicitors' fees will be cut if you use them to buy as well as to sell a property. One in three solicitors offers a discount. You can also have the legal work carried out by licensed conveyancers, cutting bills further.

* When asking removals firms for a quote, decide how much packing you will do yourself, as this affects costs. Check that the firm has full new-for-old insurance against damage or loss.

* Always shop around, and obtain at least four quotes from each set of experts - lawyers, estate agents, removal firms - before committing yourself. Ask if the quotes include VAT - and get them in writing.

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