Moving house is a hugely important decision; not only because it’s one of the biggest financial transactions you’ll ever make, but also because where you live has a huge impact on your emotional well-being and the happiness and development of both you and your family.

So, deciding whether or not moving house is a good idea goes far beyond the financial implications and should include practical considerations like commuting distance, school catchment areas and property size, as well as the emotional side of whether or not a new property would offer a more harmonious living space than the one you’ve already turned into a home.

The money side of moving house

Although it’s not all about the money, moving house is a costly business and there are a number of things to consider when reviewing if it’s feasible from a financial perspective:

  1. Check your finances
  2. Is your mortgage portable?
  3. Investigate the value of your home – and the cost of the new house
  4. Watch out for fees
  5. Consider the UK economy

1. Check your finances

Your overall financial situation affects whether you can afford to move and if doing so will be a good investment. Consider how financially stretched you are now and how stretched you might be in the future, particularly if you’re planning to start a family or move to a bigger house.

Analyse your debts, savings and salary, and consider whether your salary is likely change in the near future. A higher salary should allow you to borrow more and broadens the range of properties available to you. If there’s a chance you might soon be made redundant or lose your job, now may not be the best time to move, but remortgaging to a cheaper deal might help going forward.

Mortgage lenders take all your financial details (including how much equity you have in your existing property) into account when deciding how much they’re willing to lend you if you move. Bear in mind that you can increase your home-buying budget or reduce your LTV by adding some savings if you have them. If you have any debts, try to pay those off first – it will improve your credit rating and your chances of getting a better mortgage offer from your lender.

2. Is your mortgage portable?

If you’re looking to move house, and you have a mortgage on your current home, then you might be able to take your mortgage with you. Porting your mortgage is usually faster than getting a whole new mortgage, so it’s worth phoning up your lender and asking.

When deciding whether to get a new mortgage or port your existing mortgage, keep an eye on the fees: both exiting a mortgage and porting a mortgage can incur an administrative fee of a few hundred pounds.

3. Investigate the value of your home – and the cost of the new house

If you’re thinking about moving, you’ll need to check both the value of your current property and the sold prices of the type of property you’d like to buy in a particular area, which you can do via online property portals like Zoopla and Rightmove. You’ll get a much clearer idea of property value via the sold prices rather than the asking prices because these are often optimistic and potentially overinflated.

Look at the house price trends in potential buying areas. For instance, if they’ve recently risen steeply, it could mean you’d be buying at the top of the market and essentially be getting less for your money. If you notice they’ve not gone up much compared to other surrounding areas you could time it right and nab yourself a bargain.

Reviewing sold prices of properties like yours in your area will give you a rough idea of how much yours is worth too. You can check your property value for free online, ask some local estate agents to give you a figure, or pay for a surveyor to give you a more accurate prediction.

Hopefully your property will have increased in value, which means you’ll be able to pay more for your next property or – if you’re moving to a cheaper area or are downsizing – can put a bigger chunk towards your deposit to give you a lower loan-to-value (LTV) and therefore a better interest rate.

Now read Tips for selling your home quickly

4. Watch out for fees

Extra fees come in many different guises and from multiple sources. Here’s a quick breakdown of the added costs you’ll need to take into consideration when deciding on whether or not to move and/or what you can afford:

5. Consider the UK economy

You must also consider the likely future direction of interest rates and work out whether you could cope if they were to increase.

The Bank of England base rate has risen from 0.25 to 0.75% since 2017. While this change is only nominal, it symbolises an upwards trajectory, which, if it were to continue, could further impact interest rates.

The bigger your mortgage, the more an interest rate rise will impact your monthly repayments. Use an online mortgage calculator to assess what kind of interest rate hike you could reasonably afford.

Other considerations when moving house

  1. Location
  2. Family
  3. Infrastructure
  4. Jobs and schools

1. Location

When moving to a new area, make sure to do your homework on it first. It may be closer to work, but what are crime rates like? Is there a train station and how frequently do the trains run to and from it?

Look at recent improvements to the local area. Have new schools, shops and restaurants opened recently? Or, does the area seem run down and neglected? These factors could influence current and future prices and help you decide whether a move there is a good financial investment.

Watch out, though – in some cases, an area’s up-and-coming status is so well known that it has already been factored into property prices. But if you time it just right, buying in a neglected-but-improving area could offer you the chance of a bargain.

2. Family

If you have a family or are planning one, any home-buying decision has to take into account your changing needs.

Putting aside whether the new house is a good financial investment, it also has to work for your family: from factoring in the local schools to the number of bedrooms and the size of the garden.

Your budget usually dictates the space and size of the property you buy, but perhaps try and shift your focus on to how much your growing family will grow by, consider how much space you’ll need to accommodate that and work your way backwards from there. Where could you afford to buy a property like that? Moving house is an expensive process, so try and think as long-term as your budget allows.

If you’re a tradesperson or good at DIY, you could buy a run-down property for a bargain price that you can improve and extend over time. If you do this successfully, it could be a good financial investment as well as a property that grows and develops alongside your family.

3. Infrastructure

Decide what facilities are most important to you and check if potential locations have them. Do you need to be close to public transport? Is there (free) space for you to park your car?

Think about all the things that annoy you about your current location, like how difficult it is to get a doctor’s appointment or that there is no nearby large supermarket (which tend to be cheaper than small, local ones) and inquire if potential locations have the same issues or not.

Check out the local facilities at any other location you’re considering before deciding if moving there is a good idea.

4. Jobs and schools

Any potential move must take into account where you and your family need to get to and from each day.

If you drive to work, how far is the office from home and what are the roads like? If you drop your children off at school on the way, is this is the same direction as your commute – or the opposite way, thus adding precious minutes to your journey? Depending on the ages of your children, consider the impact of location changes as they move from pre-school to primary and then secondary school and how this might affect your property location choices.

There is little point in moving to a bigger place if you end up spending hours battling to get back and forth to school and work each day. Ideally you want a new home to be a good investment, both in terms of your finances and you and your family’s quality of life.

Improve your current home

If you cannot find a suitable option elsewhere, consider improving what you already have. It could wind up being a far more cost effective option than moving to a bigger home.

In many areas in London and the South East, for example, just one extra bedroom could increase a property’s value by £50,000 or more. However, if you live in the North East where the value per square metre is lower, it might be better to move. Of course, if you buy a bigger home at a higher price the scope for investment growth increases.

Now read Should you do up your home or move?

In conclusion, there are many factors that affect whether moving house is a good idea, and not all of them are financial. You must weigh up the direction of house prices, both where you live and in your next chosen destination, alongside infrastructure improvements and decide if any new location has the right schools, transport links for your commute and offers you the right kind of environment for you and your family. Good luck!

Edited by: Sarah Guershon

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