According to property portal Rightmove, the average cost of a home in central London over the past year was £1.57 million. Flats sold for £1.37 million, on average with terraced houses going for £3.3 million and semis fetching just under £3 million.
Homing in on the Chelsea market, on the same portal, reveals the average cost of a home over the past year at £2.32 million.
If you are thinking of making 2022 the year when you sell your central London home – maybe for more space or a move out of the capital - you might have got the timing right. The housing market remains buoyant after the stamp duty holiday, with a shortage of supply and high demand for the right properties.
If you haven’t sold before, or not for a while, you might be wondering how much it will cost to sell your central London property and about the fees and charges you will need to factor in. To help you, we explore seven key costs of selling in central London in 2022.
1 Estate agent fees
Despite the growth of online estate agents, most people still choose to use traditional high street branches. These agents usually charge a percentage of the selling price, plus VAT.
How much estate agents charge will vary - they may offer you a low fee if they really like your house and believe they can sell it for a premium or if they want more business in your location. You will pay a higher percentage commission if you place your home on the market with more than one agent. In most cases, you will only pay the fee if the house actually sells – but always check your contract.
Generally, fees range between 1 and 3% - equivalent to between £15,700 and £47,000 on that average £1.57 million central London house sale.
2 Mortgage charges
There are two mortgage costs to consider if you are selling your central London home - mortgage exit fees and early repayment charges.
An exit administration fee is the charge your lender makes to close your mortgage file when your mortgage balance is cleared. Not all lenders make these charges but, if they do, expect to pay around £300.
You may be faced with early repayment charges, of between 1% and 5% of your loan, if you pay off your mortgage early. This is often the case if you wish to repay a fixed rate mortgage before the term is up. Details of these fees should be included in your original mortgage documentation, so it’s worth checking.
3 Conveyancing fees
You will need to appoint a solicitor or licensed conveyancer to deal with the legal aspects of selling your home. Some will charge you a fee based on a percentage of the value of your property, while others will charge a flat rate. Conveyancing fees for selling a property are usually lower than for buying and range from around £500 to £1,500.
Fees will be higher if you are selling a leasehold property - common in central London - because there is additional work involved. You may also have to pay for services including for a copy of title deeds held by the Land Registry, money-laundering checks and bank transfer fees.
4 Energy performance certificate
Before your home goes on the market you will need to have a valid energy performance certificate (EPC). An EPC provides information about the energy efficiency of your property using a scale from A to G - A being the most efficient and G the least. EPCs last for 10 years, so if you already have one, you don’t need to repeat the process. However, if you’ve made energy efficient improvements to you home recently, it might be worth repeating your assessment. Buyers are increasingly interested in the energy performance of homes for sale. Costs will vary but expect to pay around £120.
5 Removals costs
Removals could cost you up to £4,000. How much you pay will depend on the size of your London house, how many possessions you have and how much time you want to devote to packing and unpacking. If you’re relocating far from the capital, this could be a factor too, as is putting belongings into storage.
If you are selling a second home, buy-to-let investment or inherited property, you may need to pay Capital Gains Tax on its rise in value. You may be able deduct the cost of any improvement work you’ve carried out and also some of the costs of buying and selling - get advice from an accountant. As a seller you will not be liable for stamp duty as this tax is paid by the buyer.
7 Preparing your home for sale
Making your home as appealing as possible to prospective buyers is crucial to getting a sale and achieving the best price for the property. A lot of the work you’ll need to do is cosmetic - cleaning, decluttering, tidying and making minor repairs. If there is a major issue, such as damp or a leaky roof, you will need to consider whether to pay to have the work done or offer a reduction on the sale price.
How to calculate profit when selling a house?
Calculate the proceeds of your sale by subtracting your mortgage balance + the costs of selling from the sale price. You should also subtract any money you spend on home improvements as well as your initial deposit and the costs of purchasing the property to work out your net profit.
If you are planning to sell a property in the Chelsea area, we can help. Contact us today to arrange a valuation and discuss how we could develop the best strategy to sell your home.