Part Exchange on a New Build: How It Works

Part exchange on a new build lets you sell your current home as part of the deal for the new one, instead of putting it on the open market and hoping the chain holds. This guide explains what it is, how it works, who qualifies, where it saves you trouble and where it can cost you, with a section for anyone selling a London home to move to Kent.

What is part exchange on a new build?

Part exchange on a new build is an arrangement where your existing home is bought as part of the purchase of a new one. Either the developer buys it directly, or a specialist part exchange provider buys it on the developer’s behalf. You are not selling on the open market.

The idea is the same as trading in a car. The value of your current home is set by an offer, that offer is put towards the new home, and you pay the balance with your mortgage and savings in the usual way.

Two models exist, and it is worth knowing which one you are being offered:

• Developer part exchange. The housebuilder buys your home itself, adds it to its own stock and sells it on later. The large national builders mostly work this way.
• Part exchange through a specialist provider. The developer partners with a company whose whole business is buying homes in part exchange. The provider values your home, makes the offer, buys it and resells it. The developer sells you the new home. Smaller and mid-sized developers usually use this model, because holding second-hand houses is not what they do.

From your side the experience is similar: one offer on your home, one purchase of the new one. The difference is who is on the other side of the contract for your old home, which matters when you read the terms.

How does part exchange work?

Part exchange works in a fixed sequence: you reserve the new home, your current home is valued independently, you receive an offer, and if you accept it both transactions are tied together so you move straight from one home to the other with no chain.

The steps, in order:

1. Enquire and reserve. You choose the new home and tell the sales team you would like to part exchange. Most schemes ask you to reserve the plot before valuations begin, and the reservation is usually subject to the part exchange offer being acceptable to you.
2. Independent valuations. The developer or provider instructs local estate agents to value your home. They are usually asked for the price the home would sell for in a reasonable time, not an ambitious asking price. That distinction is the single biggest reason people are surprised by the number.
3. The offer. You receive a written offer for your home based on those valuations. It will have an expiry, and it will be conditional on a survey and on the home being as described.
4. Accept or decline. You are not committed until you accept. If the offer is below what you will take, you can decline and sell on the open market instead, or walk away from the new home altogether. Check what happens to any reservation fee in each case before you pay it.
5. Legal work runs in parallel. Your solicitor handles the sale of your home to the developer or provider and the purchase of the new one at the same time. There is no third party buyer to chase.
6. Stay put until the new home is ready. You remain in your current home while the new one is finished. Completion on both happens together, so there is no rental in between and no double move.

That removes the two things that most often break a house move: a buyer who pulls out, and a chain that collapses further down. It does not remove the survey, the mortgage application or the solicitor.

Who is eligible for part exchange?

Part exchange eligibility is set by the developer or the provider, not by law, and the rules differ between schemes. Most require that the home you are selling is worth less than the home you are buying, is in saleable condition, is of standard construction and is your main residence.

The common conditions, in general terms:

• Value. The home you are selling normally has to be worth less than the new one, often by a set margin. This is why part exchange is mostly used for moving up rather than down.
• Condition. Reasonable, saleable condition. Structural problems, serious damp or an unfinished renovation will usually rule a home out or reduce the offer.
• Construction and tenure. Standard brick or block construction is expected. Non-standard construction, very short leases and some ex-local-authority properties are often excluded.
• Location. The provider needs to be able to resell the home, so it must sit in an area the scheme covers.
• Occupancy. Most schemes want your main home, not a buy-to-let or a second home.

Beau Property’s part exchange is arranged through a specialist provider, so the provider’s criteria apply. Ask when you enquire and we will confirm whether your home fits before you reserve.

What are the pros and cons of part exchange?

Part exchange trades some of the sale price of your current home for certainty and speed. It removes the chain, the viewings and the risk of a buyer withdrawing, but the offer is a selling price rather than an asking price, and it weakens your hand on the new home’s price.

Pros

• No chain. The buyer of your home is the developer or its provider, and they do not have a house to sell first. Nothing below you can fall through.
• One move. You stay in your current home until the new one completes. No renting, no storage, no living with relatives for three months.
• A known number early. You receive a written offer before you commit, so you know what you have to spend before the legal work starts.
• No marketing your home. No photographs, no listing, no evening viewings, no negotiating with a string of buyers.

Cons

• The offer is a selling price, not an asking price. Valuations are set at what the home would fetch in a reasonable time. If you have a figure in your head from a portal estimate, the offer may well come in under it.
• Less room to negotiate on the new home. The two prices are linked. A developer who gives ground on your home’s value may hold firm on the new home’s price, and the reverse.
• Eligibility rules cut some people out. If your current home is worth more than the new one, or is a flat with a short lease, many schemes will not take it.
• The usual new build checks still apply. A snagging inspection, the warranty terms and the reservation agreement are unchanged by part exchange.

Verdict

Part exchange suits a buyer who has already found the home they want, who values a fixed completion over the last few thousand pounds on their sale, and whose current home fits the scheme’s rules. A seller with an easy-to-sell home in a strong market may do better on the open market.

Before you accept any offer, get your own independent valuation and ask the developer what the new home would cost if you were not part exchanging. Those two numbers tell you what the convenience is costing you.

Is part exchange a good idea if you are selling a London home to move to Kent?

Part exchange often suits a move out of London, because the chain on a London sale is the part of the move you control least. It removes that risk and fixes the timing. Check first whether your London home qualifies: it may be worth more than the home you are buying.

The case for it, for this move specifically:

• The chain is the risk you cannot manage from Kent. A London sale usually sits under a chain of other buyers who are also moving. One withdrawal can push your move back months while your reservation on the new home runs out. Part exchange takes your sale out of that chain.
• Timing is usually the whole point. People leaving London tend to be moving around a school year, a new role, or a lease ending. A fixed completion date you can plan around is worth more to that buyer than to most.
• You do not have to sell a London home from Kent. Viewings, price reductions and buyer negotiations all happen in London while you are trying to live somewhere else. With part exchange, none of that happens.

The two things to check first:

1. Value. Most schemes need the home you are selling to be worth less than the one you are buying. If you are selling a London house and buying a similar-sized home in Kent, that may not be the case. Find out before you fall for a plot.
2. Coverage. The provider has to be willing to buy and resell a London property. Some are, some limit themselves to a region. Ask early.

If both check out, part exchange turns the hardest part of leaving London into the easiest. If they do not, ask about a conventional sale with a longer reservation instead.

Beau Property builds new homes in Tunbridge Wells, on the Southeastern line into London Bridge and Charing Cross, and can arrange part exchange on them.

Does Beau Property offer part exchange?

Yes. Beau Property can arrange part exchange on its Tunbridge Wells developments, handled by a specialist part exchange provider. The provider values and buys your current home, and Beau sells you the new one, so you avoid the chain and move once.

What that means in practice:

• Your current home is bought by the provider, not by Beau. The provider sets the valuation process and the eligibility rules described above.
• Beau’s sales team introduces you to the provider when you enquire, and the two transactions are run together so completion lines up.
• Enquiring does not commit you. If the provider’s offer does not suit you, you can still buy the same home with a conventional sale of your own.

If you have a home to sell and a Beau home in mind, ask us about part exchange when you enquire and we will set the valuation in motion.

Part exchange on a new build: frequently asked questions