Property: Let's exchange addresses: David Lawson talks to home owners who have successfully swapped houses when conventional selling failed

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IF property ownership is the religion of the late 20th century, first-time buyers are its gods. From them all blessings flow - mainly because they start chains that allow everyone else to move. But these gods are not immortal. What happens when they vanish?

By the end of this decade the last stragglers from the Sixties baby boom will have taken the plunge into home buying. Property ownership will top out somewhere between 70 to 75 per cent of the population, compared with today's 65 per cent. The massive growth of novice buyers that has relentlessly driven the market upwards since the war will be over.

We have just had a taste of what may be in store. Three years without first- time buyers brought prices down with a thump and locked more than a million into overpriced homes. But some sellers rediscovered an age-old remedy that may rescue the next generation of owners. They bartered property.

Exchanging homes is usually associated with postcards in newsagents' windows from council tenants who have no other way to move. Few owners see the advantages when there is a ready buyer around every corner. Even when those disappear they are locked in a system driven by agents and lenders who thrive off dealing, and lawyers who hate changes to their paperwork.

Yet bartering can save time and money. Find someone who likes your place, see whether his suits you, then work out a settlement for the price difference. That is not always easy, but savings on agents' fees give both sides a cushion against any shortfall in the expected value of their homes .

Another useful benefit is that exchangers pay stamp duty only on the difference between the values of two properties. This was made even more attractive in the Budget, when the threshold at which duty comes into force was doubled. That eliminates any payment providing the two homes are within pounds 60,000 of each other.

But the main reason why bartering has taken off in the last couple of years is that it unchains owners from first-time buyers. Swappers deal only with one other owner. Conventional buyers and sellers, in the main, join a chain that cannot function without a first-time buyer at the beginning.

Some work through agencies that computer match properties, paying an annual fee to receive regular lists of homes within their price range, which they follow up themselves. Peter Jones, who has helped put together almost 5,000 swaps in the past five years through the Portsmouth-based National Property Exchange, says: 'We handle homes worth around pounds 30,000 to more than pounds 200,000, ranging from people who want to move a couple of streets to those travelling the length of the country.'

Figures have soared since the slump. 'Around 40 per cent are people who cannot find a conventional seller, while the rest see it as a way of saving agents' fees,' he says.

David and Susan Flashman might still be stuck in their old home in Orpington if at least one agent had not seen the advantage of breaking convention and promoting swaps. 'We advertised in the local paper and looked at half a dozen houses but could not find one that was right,' says Mr Flashman.

Unknown to them, Justin Flanagan, of the local Hamptons branch, was trawling the same waters. The owner of a pounds 550,000 home that was proving difficult to move had been persuaded to take a smaller one from a potential buyer in part-exchange. This was then let out. 'We tried out the idea on other customers and got a favourable response. Since then we have done around a dozen swaps,' he says.

Susan Flashman saw the advert for one, a new house in Keston Park that had come down in price from pounds 250,000 to just over pounds 190,000. 'The owner was having problems,' says Mr Flashman. 'In fact, it was due to be auctioned the day we exchanged contracts.' They swapped their bungalow, which had dropped from pounds 132,000 to pounds 108,000, and made up the difference in cash.

'It was about the only way we were going to be able to move up-market,' he says. 'The interesting thing was to see how many people were trying to move down the ladder through a swap. I would recommend others to try it if they are having problems finding a buyer.'

A mere pounds 1,500 changed hands when Shane and Dawn Jones found both a new home and a business. Shane had been feeling desperate after losing his job and watching the house he had built in the Medway area sit unsold for two years. So he combed the market for shops, aiming to solve both problems by offering to swap. Now the couple runs Walmer Stores in Deal, after exchanging with an elderly couple who wanted to move into the Medway area.

Many owners of post offices, news-agents or general stores would like to retire, while a backlog of potential buyers is building up among people who want to change lifestyles or have been made redundant and need a new living. But the two sides are kept apart because buyers cannot sell their homes and banks are being tight-fisted with money for setting up businesses. Swapping is a natural solution, says Judy Terry, of Christie &Co, the agents that arranged the exchange.

But there can be pitfalls for the unwary. 'We almost took a place in Cornwall but found out at the last minute that it was substantially overpriced,' says Mr Jones. 'I would recommend anyone doing a swap to stick to an area they know, so they have some idea of the right values.'

It is surprising that more agents do not promote swaps. It would help to shift property stuck on the books for years and bring in fees from both sides of the deal if they match two of their own customers. As Hamptons points out, 80 per cent of all moves are within 10 miles, so exchanges should be relatively easy to arrange.

By the end of the decade agents may find themselves forced into this role, although Peter Jones feels they may be too late to reclaim lost ground from agencies such as his.

'There are 12 million owners, most of whom will want to move over the next 10 years. Meanwhile, first-time buyers essential to their chains of deals will be steadily disappearing. Even the current surge is starting to fade.'

(Photograph omitted)