Should I stay or should I go? The real costs of moving out of the city
There’s no denying that Covid-19 has had a significant impact on all areas of our lives – including how we work and where we live.
Most workers have been working from home over the past year, something that was pretty much unheard of before March 2020.
Industries that traditionally required employees to be in the office five days a week have been turned on their heads as staff were forced to work completely from home for the first time ever.
As a result, for the first time in 30 years, London’s population is falling. The coronavirus pandemic has slowed the flow of people moving into the capital, while the desire for room for a home office and outdoor space has caused a growing number to depart.
But, even in the countryside, the grass can always be greener – and while living in a rural area is almost always cheaper, especially when compared to London, the extra space can come at a cost you mightn’t expect.
For the first time in 30 years, London’s population is falling
House prices rising in rural areas due to lockdown
House prices are rising through the roof and it seems that every month a new record is broken for sales and transactions.
The Land Registry, which records actual house sales, showed that prices in England rose annually by 8.7% to February this year, to an average of £268,291.
House price data from Nationwide and Halifax echoed this, with rises of 5.7% and 6.5% to March.
Prices aren’t rising at the same levels across the country though and the North West has seen the greatest rises, of 11.9%, while London has seen the lowest, by 4.6%.
Further evidence of the move out of London was seen with asking prices of houses within London’s commuter belt shooting up 12.8% in the past year, according to research from the MCR Property Group.
While a third of Londoners said they’d like to move house and of those, half wanted to be out of the city, according to data from the London Assembly Housing Committee.
The disparity between prices across the country suggests that instead of buying in London, people are now more likely to be moving out of the capital to areas - such as the North West.
Along with the desire to move out of the city and to find more space to live in, a major reason for the surge in house sales has been the temporary holiday for stamp duty.
This has meant anyone buying a house pays no stamp duty on the first £600,000. For houses worth more than this, that’s an automatic saving of £15,000.
This was brought in last summer as a temporary measure and was expected to be axed at the end of March.
But in this year’s budget Chancellor Rishi Sunak announced it would be extended for another three months fuelling the house boom further.
The hidden costs of country life
Before we all pack up and leave the city, it’s worth looking at the costs of a big move.
At some point things could return to normal and if you have dropped everything and moved miles away from your office, it’s worth considering your options.
If you’re able to work flexibly then it shouldn’t be a problem but if you’re required to come into the office speak to your employer before you move.
You might be able to arrange a semi-flexible working week where you’re not required to work every day, or it might agree to let you work from home permanently.
Whatever the case, try and get anything agreed in writing.
Before you sell up, it's crucial to do your sums
For instance, transport costs will be considerable if you’re moving somewhere remote that requires you to buy a car, which will increase your outgoings.
If you’re in a remote location instead of a city, it might not be as convenient to walk to a local shop and therefore using a car or public transport for daily tasks such as grocery shopping or dropping your children at school also need to be factored in.
Working from home also requires a decent broadband connection which unfortunately does not apply everywhere.
Not all areas of the UK are well connected, so when you're doing your house hunting, it’s essential to carry out a broadband speed check while you're at it.
While living in a rural area is almost always cheaper, the extra space can come at a cost you mightn’t expect
Before you pack your bags, crunch the numbers carefully
Finally, we are on our way out of lockdown and there's a light at the end of the tunnel.
But while the last year may have knocked you for six, bear in mind that making a major move or purchase isn’t something to do on a whim – so ensure that you consider all the pros and cons before relocating to a rural area.
Having the chance to create the country life you’ve always dreamed may be within arm’s reach, but it’s never going to work out if the costs don’t add up.
3 things to do right now...
Set a budget. Whatever stage of life you’re at, a budget is your number one tool for managing your money. Whether you use an app or simply write down all your incomings and outgoings, it’s vital for staying on track and making sure your housing costs are manageable whatever might come up
Don’t forget moving costs. It’s not just the deposit you’ve got to find, there’s hundreds of other ‘little’ costs that seem to arise when moving to a new house. Make sure you consider all your expenses such as the packing boxes, moving van, cleaning costs, new furniture, installation costs of new services and parking permits at your new home.
Consider income protection insurance in case you can’t work due to illness or injury. This means that you could receive 50-70% of your salary to keep food on your table and a roof over your head.
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
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