Moving houses and your Finances

Moving house? Worried about your house finances? This article is aimed to help ease some of that stress by trying to de-compartmentalise the financial actions that need to be taken when moving property.

A Guide to Finances when Moving Rental Property

It is a well known fact that one of the most stressful things that will probably happen in your life, aside from divorce, is to move house. I am currently going through this process at the moment. This article is aimed for those of us in the rental market but many of the ideas are transferable to the buying market.This article aims to reduce some of that stress by helping you to organise your finances ready for the move.

The Old House Finances

There are a number of financial matters that will needed to be finalised in your old house whist simultaneously sorting the new house finances.

The following is a step by step guide of things that you should think about when moving house:

1. Make sure that once the final payment comes out of your account and is transferred to the account of the letting agent or landlord, call up your bank and cancel the direct debit. You want to try to minimise all risks of having any cash flow problems once you've moved. Cancelling the direct debit should ensure that your landlord it letting agent cannot "accidentally" take an extra payment once you've moved.
2. Call up all bill Companies one month before you leave. You should ask each of them in turn what their policy is on customers looking to close their accounts with them and how much notice you should provide them. Once they have explained the process, write a reminder (set an alarm on your phone!) on the dates that you need to cancel you bills.
3. Do not forget all the Companies that you pay bills to. Write a list of which Company provides your heating, gas, electric, water, Internet, phone line, digital TV, and council tax. For all of these Companies follow step 2.
4. Be aware that some Companies will have Contracts that you cannot just cancel. You may need to buy your way out if the remainder of your contract with these Companies. Unfortunately this is tough luck but we'll know for next time that we must check that we are entering a 12 month contract only!
5. Once you've moved out/ the time has come to give notice to cancel your bills then call up the various companies and make it so! Following this make sure that you cancel the direct debit with your bank just as a precaution.
6. Once all the final payments have been settled and you have recovered any balancing credits owed to you I would advise closing your current account, assuming the account is not your main account. If this is not possible I would recommend monitoring the account for the next couple of months to make sure that there are no unwanted direct debits leaving your bank account.

The New House Finances

The following is a list of procedures that you should take when sorting out the finances and bills for your new house:

1. The best think to do is to set up a separate account well in advance of the move. Typically banks can take 2 weeks to fully set up your account (except for a few newcomers to the market who can have an account set up within half an hour of walking into the branch). To be on the safe side I would allow 3 weeks prior to moving to set up the account. 
2. Fund your account (and get your flat mates, where appropriate,) to the tune of your deposit (normally 6 weeks rent in the UK), the first months rent and any administration fees (that many agents unethically charge). 
3. The next step is to work out how much is going to be required in terms of bills. You can normally find what band of council tax your next property will be in by searching online. Otherwise, you can call the local council to find out. Add on an estimate for Internet based on your soon-to-be supplier's Internet quotes. You can ask the previous tenants what the water, gas and electric bills will be. Alternatively you could go on or other price comparison website to get a quote. Pick a quote from the middle of the list, rather than the cheapest. This is more prudent. Don't forget to add on any household items such as cleaning products, toilet roll, or kitchen roll. I usually estimate this to be about £15 per month for a four bedroom house. If you consider this to be too high then remember that it is always better to be prudent. Now add up all the bill costs plus what the rent is and divide that total by the number of flat mates. This is the amount of direct debit that each person should contribute towards the house finances.
4. Make sure that all the flat mates contribute an extra £100 each at the beginning. This should cover any TV licence payments or surprise costs. It should also provide a float to save any risk of going into your overdraft.
5. Once you've moved (after paying the deposit and the first months rent) you can set up all of your direct debits for the bills and rent. I'd encourage you to shop around on price comparison websites to find cheaper deals on your energy, if possible.

It's all about automating as much as possible so that you don't have to worry about making payments at the correct time. Direct debits and standing orders are a wonderful service from the bank. Just make sure that you check them every now and again.

Moving house is a difficult and stressful time. Hopefully this helps ease some of the stress a little. Now you just need to pack up and move! Good luck.

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