Necessity is the mother of invention, so the saying goes – and never has a breath of fresh air been so sorely needed as in the current housing market. In August, estate agents agreed an average of just five sales, according to figures published last week from the National Association of Estate Agents (NAEA). This compares to 12 sales in the same month last year, and 15 in August two years ago. And it does not even reflect the latest economic turmoil.
But out of the ashes comes innovation – such as the new online property-swapping service, HomeSwapper 4Sale.co.uk. As the name suggests, the site matches suitable homes belonging to people who want to move but are unable to do so as a result of a lifeless housing market.
One such couple, Paul Cutler and Georgina Chapman, purchased a semi-detached two-bedroom bungalow in Denton, near Brighton, two years ago. They bought from Georgina's mother at the market rate of £174,000. The pair, both 29, planned to refurbish the property and sell it on, using the rise in value and anticipated boost in equity as a deposit on a different home closer to London. But that's not how it worked out, says Mr Cutler, a BBC sound engineer.
"Having spent thousands on making the home really special, we completed the work at the worst possible time. We put it on the market more than two and a half months ago for £217,000 and have not had a single viewing. We reduced the price to £214,000 but it hasn't made any difference. Although our estate agent was really impressed with the property, he says that the market has just dried up."
Two weeks ago, the couple decided to explore alternatives. "I had used swapping websites before, when I exchanged a phone for a camera .... So I looked on Google to see if you could do the same with a home – and found HomeSwapper4Sale," says Mr Cutler.
People register on the site by inputting key criteria. These include ideal location, number of bedrooms, type of home and property value – which will be within 15 per cent either way in search results. Registration is currently free but a charge of £20 or so may be applied when the site is fully operational.
HomeSwapper4Sale joins other swapping websites that focus on property, including Swap2go.co.uk and Swap-homes.com.
Mr Cutler and Ms Chapman are still waiting for the right swap – the first was too far outside their ideal location of Haywards Heath in West Sussex. If they are successful, however, they will only find themselves at square one of the traditional buying and selling process.
Each property will need to be valued for mortgage purposes. And if there is a difference in value, the shortfall will have to be negotiated. Trevor Kent, managing director of Buckinghamshire estate agents Trevor Kent & Company, says this can often cause problems with the party trading down. "People get used to how they live and even on a standard sale it's hard to persuade that party to accept a lower level of accommodation for the right price."
But Ralph Catto, chief executive of HomeSwapper4Sale, who runs a similar home-exchnage operation in America, says people are more likely to be reasonable in this type of arrangement. "It's not the same as trading on the open market which, as we are now seeing, can result in conflict and stalemate. When there are just two sides involved, there is little point arguing."
Swappers won't get out of stamp duty either, warns Charles Smailes, past president of the NAEA. "The home will still need to be valued to be conveyed and the tax will be payable on this full value."
And, by the nature of the site, most properties registered will fall the wrong side of even the temporarily raised stamp duty threshold of £175,000. "As you need a property to swap, first-time buyers don't use the service," says Mr Catto. "It is second- or third-time buyers, so the average value of a property on the site is £275,000."
Sellers will also need to apply for a home information pack (HIP), costing about £350. This can be done by contacting a HIP provider or by using a price-comparison website such as reallymoving.com.
Estate agents, by contrast, will invariably offer to arrange a HIP, and payment may only be required on completion of a sale.
However, home swappers have the chance to avoid paying the middleman. "Neither swapper has to brave the market and you don't have to pay estate agency fees," says Mr Cutler. "However, to maximise our chances of a sale, we kept the property on the market anyway. I was honest with my estate agent about this."
In fact the property market is so quiet that some agents are taking a similar view. "I think sellers should be doing everything they can to try to shift their homes," says Mr Kent. "As estate agents we are trying our best but nothing is happening – [it's] a lot worse than the last downturn between 1989 and 1993 when prices fell by 5 to 7 per cent."
Whether property "swap shops" can prosper is a different matter, adds Mr Kent. "Just like a dating website, it's rare that two homes will be matched into a marriage. But it's worth a go."
Peter Bolton King, group chief executive of the NAEA, says: "Any time the market hits a low point, these ideas are pedalled out. In the early 1990s, people started advertising their homes privately in newspapers for sale or swap, and some even sold raffle tickets. For the vast majority, though, it was not a solution as most people are nervous about going through this without the support and advice of an estate agent. But there will be a minority for whom a swapping service will suit."
While HomeSwapper 4Sale has not been active long enough to reach any completions, it has already made 200 property matches – some of which could be successful. "We are keeping an open mind," says Mr Cutler. "But in all honesty, my preference would be to sell our home on the open market for a price we think it deserves."