I don’t know UK laws, but you also get dinged in the US on property taxes (pay half a year), home insurance (can’t close without it), HOA fees ($500 selling our house this year despite our HOA being otherwise meaningless), warranty (not consistently required) and various local costs that are associated with the municipality or state — not to mention mortgages are deliberately designed to make their money even if you pay them early.
Again, I’ve never bought/sold in the UK, but in the US you could easily see $100K in costs on a transaction of ~$2M, and the percentages will go up as you move down market.
Re:Are short-term home sellers screwed?
by moocow01 on Tuesday January 09, 2018 @11:57PM
(#16112660)
Your missing another big one which is the cost to hold the house. If you're an average flipper that investor money is going to cost you about 1% per month of the purchase price so you can probably assume another 3% or so there.
After that you need to factor in your time as the flipper (time to do the purchase analysis, acquire the property, fixup the property, market the property, sell the property). Ultimately for flippers a 15% spread between purchase and sale would usually be a sizeable loss
Still, if you assume the broker got paid say 1.5%-2.0%, the stamp duty was 3.5-4.0%, there's still a sizeable margin in between.