Article What could it cost to move out for the first time?

Moving into your own place for the first time is an exciting milestone. Whether you’ll rent, or you’re aiming to buy your first home, you’ll likely need to plan and save for a while first. 

Here we’ll walk you through the costs of moving out and the financial landscape of living independently. The types of costs you’ll face will depend on whether you’re renting or buying a property. Here, we’ll explore essential costs like rent, utilities, and moving expenses while offering budgeting and saving tips along the way. 

Whether you’re ready to move into your own space, or you’re a parent wanting to support your children into the next phase of their lives, this guide is for you. Everyone’s circumstances are different so moving out of the family home might not be feasible for you right now. Even so, this article might give you a few ideas for the future.

Think about monthly rent payments

As a general rule, it’s often suggested that no more than 30% of your monthly income should go towards your rent.¹ This is to avoid overstretching yourself and leave enough slack in your budget to account for higher energy bills in winter. It’s also important to maintain regular savings for retirement and emergencies.

Let’s look at an example. Trisha is 21 and works 35 hours a week, making £20,000 a year. After tax, her income is £17,921, or £1,493.46 per month. Using the recommended 30% figure, Trisha should be paying no more £448 a month (£5,376 a year) in rent. Depending on where in the country Trisha lives, she might be able to find a houseshare or rental for this price.

Remember to factor the deposit in as an upfront cost

This usually can’t be more than five weeks’ rent if the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above.² Remember that since 1 June 2019, there are certain charges landlords can request from you. Read GOV.UK’s tenant fees act for more information.  

Review what your mortgage repayments could be

You might know that interest rates on mortgages are currently quite high following a decade at low levels while the base rate of interest was at record lows. Having a larger deposit of more than 10% could give you access to the cheaper mortgage deals available, but this will also depend on other factors such as your credit history.

A common income mortgage lenders use when deciding how much to lend is 4.5 times earnings. Based on her current salary of £20,000, and if she managed to save up a deposit of £10,000, Trisha might be able to look at properties costing £100,000.  

It’s important to note, though, that lenders look at many more factors than just your income when assessing your affordability for a mortgage. Factors like your debt, spending habits, credit history and whether you’re on the electoral roll will also count.

Factor in everyday household expenses to your budget

Utilities like electricity, gas, water and broadband need to be accounted for. The average annual cost for a small household (1-2 people) for gas is £597.99, while for electricity it’s £660.34.³ This can vary depending on many factors such as where you live, and also how you pay. Sometimes providers might charge less if you pay by direct debit.

Look at moving costs

These can vary based on distance and the amount of belongings you have. While professional movers can be expensive, there are more affordable options such as renting a van and asking friends and family to help. ‘Man with a van’ services are likely to be cheaper than specialist movers.

Think about what furniture you need to help you get started

If you’re hoping to buy a property, you’ll almost certainly have to furnish it. So remember to factor in the cost of furniture on top of utilities, moving, and your mortgage repayments.

While some rental properties come unfurnished, others are partially or fully furnished. Consider if you want to be responsible for furnishing your new space from scratch, as it could be a considerable cost.  If you’re looking to find affordable furniture, consider second-hand retailers, or private sellers of used furniture, for example on Facebook marketplace.

And don’t forget to sort out your life admin

Once you’re settled somewhere, there’s life admin to take care of such as exploring local amenities, registering with a GP and stocking the fridge. If you’ve never lived independently, your family could help you learn practical skills such as cooking from scratch, DIY and home maintenance. They might even lend or gift you old furniture or help you hunt down and transport secondhand finds. Check out our article Life admin tips to save you money for more pointers.

Tips to consider if you’re saving up to move out

Moving out of the security of the family home and into your own space for the first time is becoming more challenging for young adults. There are many reasons for this, including rising living costs and a shortage of affordable housing. Some adult children are now staying put well into their 30s – one in 10 aged 30 to 34 are still in the family home.⁴

By adopting a long-term view, you might be able to save up more towards the amount you’re aiming for while improving your financial wellbeing.

1. Create a long-term plan

Developing concrete long-term plans is an important part of financial wellbeing. Financial wellbeing means feeling confident and in control of your money both now and in the long term. This could mean having ambitions and goals for the medium and long term. For example, if you’re living at home, this could be moving out within a year. If you’re about to move out, your aim could be independently to fund your first year. In the longer term, you might see property as part of the way you’ll fund your retirement. Find out more about how to create long term plans in our financial wellbeing index.

2. Envision your future self

Visualising what your ideal future looks like could help you develop a connection to your future self. Your money will be going toward the things in life that bring you joy and purpose. We find that people who do this are more likely to have a rainy day fund, are less likely to have debt, and better able to pay off their mortgage.

You can find out more about financial wellbeing and your money mindset using our financial wellbeing tool.

3. Ask how your parents or guardians could help

You might need the support of parents, guardians or other family members to make the move into a home of your own. This could take the form of financial support, for instance, if your parents have been putting money aside to help you with a house deposit. But not everyone will be in a position to offer financial assistance. If this is the case there are many other ways parents or guardians can help.

They could come with you to view properties, pack boxes and drive the moving van, or assemble furniture in your new place. They could help you navigate rental contracts and inventories for the first time, by taking photos to show the property’s condition, or setting up utilities.

Achieving independence and financial control

Moving out of the family home and into a place of your own can be a rite of passage. To make it happen, forward planning and careful money management will be important, as well as family support and the right mindset. Staying in control of these aspects can become a key part of your financial wellbeing, and will help you find fulfillment in your independence.

Read more articles about how to manage your money and get set for the future on our Money Tips hub.