Part Exchange explained

What is Part Exchange?

Part Exchange is a homebuying scheme that allows you to trade your current property for a new-build home.

Instead of selling your home on the open market, you sell it directly to the housebuilder. This means you can avoid estate agent fees and waiting on a property chain.

How does Part Exchange work? A step-by-step guide

Every move is different and subject to individual housebuilder criteria, but if you choose a Part Exchange scheme, you can typically expect the following steps:

1. Application

You'll start by looking at new developments and checking if your preferred home is available for Part Exchange. Once you’ve selected a property, you may need to complete an application form to determine whether your current home is eligible for the scheme.

2. Reservation fee

This step varies by housebuilder. You may be asked to complete a reservation agreement and pay a reservation fee with your application. This takes the property off the market.

3. Valuations

If your application is accepted, the housebuilder will arrange independent valuations of your current home. These help determine whether they’ll make an offer and at what price.

Part Exchange valuations are often carried out by estate agents to estimate how much your home could sell for within 8 to 10 weeks, though this timeframe can vary. Some key factors agents look at include:

• Recent sale prices for similar homes in the area
• Current market conditions and buyer demand
• The size and condition of your property
• Many housebuilders arrange at least two independent valuations.²

4. Offer

Once valuations are complete, the housebuilder will decide whether to make you a preliminary offer. The initial offer is often provided verbally.

Remember, you don’t have to accept the offer if you’re not happy with it.

5. Survey

The housebuilder will instruct a qualified surveyor to assess the condition of your existing home before they commit to a purchase. Surveys can reveal issues like structural damage, damp or any urgent repairs.

6. Legal checks (conveyancing)

Conveyancing, the legal process of transferring a property from the seller to the buyer, usually begins once an offer is accepted and ends when all the legal checks are complete. A solicitor or licensed conveyancer can carry out these checks.

This step usually involves:

• Reviewing contracts and raising enquiries
• Carrying out property searches on your new home to identify potential legal, environmental and planning issues. These differ from a survey, which investigates the building’s physical condition
• Liaising with mortgage lenders and coordinating money transfers
• Handling the exchange of contracts and completion

7. Mortgage arrangement

While your solicitor manages the legal side of the move, you’ll need to secure your mortgage offer.

During this stage, your lender will arrange a mortgage valuation to confirm that the property is worth the amount you plan to borrow. Some lenders include this at no extra cost, while others charge a fee.

Once your mortgage is approved, your lender will issue a formal offer that confirms how much they’re willing to lend and sets out the full terms and conditions. A copy should also be sent to your solicitor so they can review the offer and raise any queries if needed.

8. Exchange and completion

When all legal checks and your mortgage offer are in place, you’ll likely be ready to exchange contracts. This is the stage where both your sale and your purchase become legally binding. You pay your deposit on your new home. Then, upon completion, the remaining funds are transferred, ownership of both properties changes hands and you receive the keys to your new home.

Key benefits of Part Exchange

Part Exchange can offer a more straightforward way to move for some homebuyers. Key benefits may include:

• A simpler timeline, as you’re not waiting for a buyer to sell their property
• Fewer moving parts to manage

However, Part Exchange may not be suitable for everyone. It’s also worth noting that you’re limited to plots and developments where the scheme is available.

Eligibility for Part Exchange

Eligibility criteria can vary between housebuilders. You can check with your chosen developer to find out whether your current home qualifies for Part Exchange.

Speak with a knowledgeable Sales Expert at your chosen development to find out which homes qualify for Part Exchange. We can guide you throughout your homebuying journey.

Disclaimer:

For full details of this scheme and its terms and conditions, please visit our Part Exchange page.

Our Guides and Inspiration blog aims to provide information you may find useful as you explore your homebuying options. However, the articles are for general informational purposes only and do not constitute professional financial, legal or mortgage advice.

Speak with independent financial and legal advisers regarding your specific circumstances. Scheme availability, eligibility criteria and property details are subject to change. Please check with our Sales Experts for the most current information on available homes and support options.

References:

1. https://www.rightmove.co.uk/guides/buyer/once-offer-accepted/chains/ ↩
2. https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/part-exchange-house/ ↩