THE PRICE OF BUYING A HOME

[Advance Investments, Saturday, 20 May 2006]:

New research from National Homebuyers, the property purchasing company, has confirmed that selling the average house through the traditional chain process could cost as much as 22% of the value of the property, or £44,575.39.

Based on figures from bbc.co.uk, HM Treasury, The Office of National Statistics and Hometrack, National Homebuyers has found the costs of selling property through the traditional chain model are much higher than publicly perceived. The results combine the costs of estate agents fees and solicitors fees added to the hidden costs of selling your property the opportunity cost of what you could have been doing with your time - as well as other considerations.

Based on property chain sales falling through one in three times (bbc.co.uk), the result has been set out in three outcomes a direct sale, as well as the chain falling through once and twice.

Detailing a comprehensive list of costs of the time involved in selling the house, as well as housekeeping to a sale standard, dealing with estate agent valuations and viewings, and changing the price to speed up the sale once the chain has fallen through, the results were as follows:

Average UK property: £205,674 (Hometrack)

No chain break - (66% chance) - £21,243.05 - 10.3% of property value

One chain break - purchaser withdrawal - (33% chance) - £32,903.34 - 16.0% of property value

Two chains break - purchaser withdrawal - (11% chance) - £44,575.39 - 21.7% of property value

David Harber, Communications Director for National Homebuyers makes the point that the research details the true cost of the inefficiency of selling your property in the open market.

The research figures included: Average UK property, £205,674 (Hometrack); average monthly mortgage payment, £639.50 (Office of National Statistics, HM Treasury); average UK salary, £22,422.40pa (Office of National Statistics); average number of viewings per offer, 11.2 (Hometrack, March 2006) and average time to sell a property, 7 weeks (Hometrack, May 2nd, 2006).