When there's no way out, try a home swap
In a market where homeowners who need to move feel trapped by plunging prices, Chiara Cavaglieri looks at the web services that may offer a solution
Sunday 22 March 2009
The continued decline in house prices and restrictive lending criteria have narrowed the options for homeowners looking to up sticks, just as the threat of redundancy forces some to relocate to follow work, or downsize their property to save money. With sales at historic lows, thousands of people are likely to be stuck in a property rut, wanting to move but unable to do so.
This is where home-swapping websites can help. Services that began as a way to arrange holiday accommodation have transformed into exchanges for permanent moves. HomeSwapper4-Sale.co.uk and EasyHouseExchange. com may come of age as homeowners try to break through the buying-and-selling impasse.
Often labelled as a bricks-and-mortar "dating service", these sites offer a meeting point for homeowners, who upload details about their properties in the hope of matching them with other homes that suit their needs. Those with matching properties can then get in touch with each other and start making arrangements for a swap.
One benefit is the opportunity to avoid estate agents' fees – up to 3 per cent on the price of any property sold – and since there is no chain, house swapping allows people to make the move quickly, with far less risk of a sale falling through.
"The conventional way to move, via estate agents, is not proving successful at the moment," says Richard O'Driscoll, the director of EasyHouseExchange. "We're trying to unblock the UK's problem and help those people who have to move and are finding it difficult through the normal channels."
This isn't to say that home-swapping sites don't have room for the middle men. Many people still want an estate agent to help with negotiations and to arrange the home information pack (HIP). Indeed, some agents are using the sites to market property on their books if the vendor has expressed an interest in swapping. This way, they market the property more widely and, if a swap goes ahead, they can still claim their commission.
"A problem for both agents and vendors is a lack of viewings," says Ralph Catto, the chief executive of Scout Solutions, the company behind HomeSwapper4Sale. "Many people are no longer looking until they have an offer on their home, which exacerbates the slow market. We drive viewings by actively matching potential swappers. If they agree a deal, they avoid chain stalemates and can be constructive around any price conflict,"
Even if a direct swap is unsuccessful, advertising a property on an exchange site could lead to a sale, he adds. "Where a swap doesn't work, one party may still become the buyer of the other's home, so for both agent and vendor there are two bites of the cherry."
For homeowners, the first step is to register with one of the several sites offering a house-swapping service. Most of these charge a fee to list a property for a set period. At EasyHouseExchange, for example, it costs private owners £49.50 per property for a three-month subscription, although there is a special "free listing" offer in place until June. HomeSwapper4Sale currently charges £19.95 for a three-month subscription. No further fees are levied if a swap takes place.
Each homeowner then provides details and images of their property, as well as a description of the kind of home they wish to move to. At Homeswapper4sale, users must specify preferred location, how many bedrooms they require, the type of home they are looking for (house, bungalow, flat) and their price range. This information is added to the database, which automatically matches sellers. Those who have been selected for a potential swap can then contact each other through the site and arrange any viewings. It is also possible, because people are dealing with others who are in a similar situation, that they may be able to arrange a trial period living in each other's properties – a sort of "try before you buy" arrangement.
If both parties are happy and ready to make the exchange, they are left to continue the process independently. However, a permanent house swap is still a legal transaction and there may be issues to be ironed out before the process is complete, "Even if you are making a like-for-like swap, you are still taking on a new property and all the usual 'due diligence' rules would apply," says Thomas Moran, partner at law firm Speechly Bircham.
The onus still lies with the homeowners to pay the taxes and legal fees, usually through a solicitor. And it is advisable to have a full survey completed to determine the condition of the home. The parties to the swap should also consider checking the market values of the properties involved, and if they have a mortgage, there must be sufficient funds to pay it off. Any price difference between the two homes should be met either with a cash payment, or by obtaining new financing from the mortgage lender,
"Technically, you would have to redeem the mortgage on your old house, but in practice many lenders will allow what is, in effect, a transfer of the mortgage from the old property to the new one, subject to a satisfactory valuation and conditions," adds Mr Moran.
Once the exchange has been completed, both parties will need to pay stamp duty on the full value of the property acquired and register the swap at the Land Registry.
At the moment, one of the biggest drawbacks with the initiative is a shortage of homes available to swap. Without a large volume of houses to choose from, the likelihood of finding a perfect match is reduced, which could mean a long wait or a significant compromise on the house and location.
This may be about to change, though, as more homeowners look for inventive ways to sell their properties. Although yet to make an actual swap, Homeswapper4sale currently has over 5,500 members and 1,873 potential matches in place. EasyHouseExchange has 650 member houses on the site, including both independent properties and homes from developers Bovis Homes and Ballard Homes. The site claims that this number is on the rise.
During the past fortnight, EasyHouseExchange has also introduced a temporary exchange option for homeowners who are reluctant to sell but need to relocate for personal or financial reasons.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'naked pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize