Part exchange is a scheme offered by some new build developers that lets you use your existing home as part payment towards a new one. Rather than selling on the open market, the developer buys your current property directly, and its value is offset against the price of the new build you’re moving into.
It’s used by both buyers and sellers in the same transaction, since you’re effectively doing both at once: selling your existing home to the developer while buying your new one from them. It’s mainly aimed at people trading up to a new build, as most schemes are built around that kind of move rather than downsizing.
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How does part exchange work
The process usually starts once you’ve found a new build plot on a development that offers part exchange. If your existing home meets the developer’s criteria, they’ll arrange independent valuations, sometimes two or three, to establish what it’s realistically worth in the current market. Based on those figures, the developer will then make you an offer for your existing property.
If you accept, your sale and purchase move forward together rather than as two separate transactions. Your solicitor and the developer’s solicitor handle both sides of the legal work at the same time, and completion on your old home and your new one typically happens on the same day. You hand over the keys to your existing property and move straight into the new one, without needing to find a buyer, arrange viewings, or wait on a chain.
Mortgages still come into play if there’s a gap between what your existing home is worth and what the new build costs. That difference can be covered through savings, a remortgage, or a new mortgage on the new property, assessed by a lender in the usual way. It’s also worth knowing that stamp duty land tax is calculated on the full value of the new build, not just the amount you pay in cash, since the value of your old home counts as part of the overall transaction.
Related: A complete guide to solicitors’ fees when selling your home
Who can use a part exchange scheme
Part exchange isn’t available on every home or every development, and developers set their own criteria for what they’ll accept. Your existing property usually needs to be worth a set proportion of the new build’s price, often no more than around three-quarters of it, since developers are generally reluctant to take on a large asset relative to the size of the sale.
Condition and construction matter too. Homes with significant structural issues, or those built using non-standard construction methods, are commonly excluded, as are leasehold properties with a particularly short lease remaining. Flats, particularly older or high-rise ones, are also routinely excluded from many schemes. Location plays a part as well, since developers typically only accept properties within a certain distance of the development you’re buying into.
Because these criteria vary so much between developers, it’s worth speaking to the sales team directly, even if part exchange isn’t clearly advertised, since some developers offer it on a case by case basis rather than promoting it upfront.
Related: Downsizing your home: Everything you need to know
The benefits, and the trade-offs
For sellers, the main appeal is certainty and speed. There’s no need to list your property, arrange viewings, or negotiate with prospective buyers, and the risk of a chain collapsing further down the line disappears entirely. Many developers also cover the estate agent fees you’d normally pay on a traditional sale.
For buyers, that same certainty makes planning a move considerably more straightforward, since your purchase and sale complete on the same day rather than depending on separate timelines. The trade-off is price. Part exchange offers tend to sit below full open market value, since developers are pricing in the certainty and speed the scheme gives them, so it’s worth weighing that against what you might realistically achieve through a traditional sale.
Related: Buying vs renting: what’s the difference?
Part exchange versus a traditional sale
Choosing between the two often comes down to what matters most to you. A traditional sale generally has the potential to achieve a higher price, but comes with more uncertainty, a chain, viewings, and no fixed timeline. Part exchange trades some of that potential value for a faster, more predictable move.
For anyone under time pressure, relocating for work, or simply wanting to avoid the stress of a chain, that trade-off can be worth it. For anyone prioritising the best possible price for their current home, a traditional sale, or getting more than one part exchange offer to compare, is usually worth exploring first.
Things worth keeping in mind
It’s worth clarifying early on what’s included in the sale of your existing home, since fixtures, fittings, and anything left behind should be agreed and confirmed in writing rather than assumed. It’s also sensible to get an independent valuation of your own alongside the developer’s, so you have a clear sense of whether their offer is reasonable before you commit.
If you’re considering a part exchange and want to know whether your current home is likely to qualify, your local Whitegates branch can help you weigh up your options.
