One of the key problems behind the sluggish housing market is the shortage of First Time Buyers. The traditional 95% mortgage has disappeared, with most borrowers required to put down a minimum of deposit 10% or more.
Until this situation eases, first time buyers will find it difficult to enter the market and therefore it will remain hard to build sales chains to get house sales moving.
The good news is that with many properties on the market for sale, there are plenty of “motivated” sellers who want to move. Part Exchange is a way in which sales chains can be completed without having to wait for a first time buyer.
Part exchange can be used in a variety of ways with the aim of completing the sales chain. It may for example involve a chain of several properties with the seller with the highest priced property taking in a property at the bottom of the chain which may be located in a different area. In the example below, the seller of the larger detached house would take the terraced house in part exchange and then either rent this out and sell it when the market improves or keep it as a long term "buy to let" investment.
- Detached House - £250,000
- Smaller Detached House - £200,000
- Semi Detached - £150,000
- Terraced - £100,000
As more and more agents are offering such schemes (including ourselves), it is worth starting to “house hunt” even if you don’t have any interest in your property at the moment. Speak to the estate agents in the area you are thinking of moving to and it is likely that there may be some sellers who will consider a part exchange deal. Certainly many of the local agents in Bury and Bolton have a list of part exchange properties.
If you would like to arrange a meeting to review the marketing of your property or to discuss our part exchange scheme in more detail, please speak to Martin Wilshaw at our Holcombe Brook office on 01204 883636.