What is Part Exchange?

For many homeowners, the dream of moving into a brand-new, modern property is often overshadowed by the logistical nightmare of selling their current one. The traditional housing market is notorious for unpredictable timelines, broken chains and the stress of constant viewings.

This is where Part Exchange (PX) comes in, a specialised scheme offered by many UK homebuilders that simplifies the transition from old to new.

This guide expands on the fundamental mechanics of part exchange, exploring the financial implications. The step-by-step process and how it compares to other incentives like Assisted Move.

What is Part Exchange?

At its simplest, Part Exchange is like trading in your old car when buying a new one. Instead of listing your home on the open market and waiting for a buyer, the property developer effectively becomes your buyer. They purchase your existing home at a pre-agreed price. That value is deducted from the purchase price of your new-build property.

The scheme is designed to create a chain-free transaction. Because the developer has the capital to buy your home outright, you aren't waiting for them to sell a property of their own.

Part Exchange (PX) is the ultimate fasttrack to your dream home, acting as a guaranteed trade-in for your current property.

Instead of navigating the stress of the open market, the developer becomes your buyer, purchasing your existing house at a fair, independent valuation. This eliminates the risk of broken chains, removes estate agent fees, and guarantees your sale.

It’s a seamless, chain-free transition that lets you stay in your current home until your brand-new one is ready. Essentially, PX trades the uncertainty of a traditional sale for the speed and security of a modern, professional handover.

How the Part Exchange Process Works: Step-by-Step

While every developer has slightly different terms, the general process follows a standard trajectory:

1. Initial Inquiry and Eligibility Check

Not every home or every plot is eligible for Part Exchange. Your first step is to identify a new-build development you like and ask the sales advisor if PX is available. Generally, developers require your current home to be worth significantly less than the new one usually around 65% to 75% of the new property’s value.

2. Independent Valuations

If you and the plot meet the initial criteria, the developer will arrange for at least two independent estate agents or surveyors to value your current home. It is important to note that they are looking for a selling price (what the house is likely to sell for within 6 to10 weeks) rather than an optimistic asking price.

3. The Offer

Based on these valuations, the developer will make you a formal offer. This offer is typically subject to survey and subject to contract. You are under no obligation to accept it, but if you do, the developer will reserve your new home for you.

4. Survey and Legal Work

Once the offer is accepted, the developer will conduct a more detailed survey (sometimes a Homebuyer’s Report) to ensure there are no structural issues. Simultaneously, both parties instruct solicitors to handle the conveyancing. The legal process for PX is often accelerated, with many developers aiming for an exchange of contracts within 28 to 42 days.

5. Moving Day

The greatest benefit occurs at the end. On completion day, you simply hand over the keys to your old home and collect the keys to your new one. There is no gap where you have to move into temporary accommodation or storage.

The Pros of Part Exchange

1. Guaranteed Sale and Speed

In a traditional sale, it can take months to find a buyer and even then, roughly one in three sales falls through before completion. With PX, the sale is guaranteed as long as the survey is clear. The timeline is often slashed from six months to just six or eight weeks.

2. No Property Chain

A property chain is only as strong as its weakest link. If someone at the bottom of a five-house chain loses their mortgage offer, the entire chain collapses. Part Exchange eliminates this risk entirely, providing immense peace of mind.

3. Financial Savings on Fees

When you sell through an estate agent, you typically pay a commission of 1% to 2% of the sale price plus VAT. In a Part Exchange deal, the developer covers these costs. Depending on the value of your home, this can save you anywhere from £3,000 to over £10,000.

4. Staying Put Until Completion

Unlike quick sale cash buyers who might require you to move out immediately, a developer allows you to stay in your current home until your new build is physically ready. This is particularly useful if you are buying off-plan (a house that hasn't been built yet).

The Cons of Part Exchange

1. Lower Sale Price

The most significant drawback is the valuation. Developers are businesses; they need to resell your old home quickly and cover their own holding costs. Consequently, a PX offer is often 5% to 10% lower than what you might achieve if you were willing to wait months for a private buyer on the open market.

2. Restricted Choice

Part Exchange is usually only offered on specific plots within a development. Often the larger or more expensive ones that the developer is keen to move. You may find that the specific house you want isn't eligible for the scheme.

3. Reduced Negotiating Power

Because the developer is doing you a favour by taking your old house off your hands, they may be less willing to negotiate on the price of the new home or offer additional incentives like free carpets, landscaped gardens or paid Stamp Duty.

Eligibility: Is Your Home Right for PX?

Developers have strict rule books for the types of properties they will buy. Common exclusions include:

• Leasehold Properties: Many developers avoid flats or houses with short leases (typically less than 80–100 years remaining).
• Non-Standard Construction: Homes made of timber frames, prefabricated concrete, or thatched roofs can be harder to resell and are often rejected.
• Location: Most developers will only part-exchange properties within a certain radius of their development or within the UK (specifically England and Wales).
• Value Differential: As mentioned, your home must usually be worth no more than 70% of the new home.

Part Exchange vs. Assisted Move

If your home doesn't qualify for Part Exchange (perhaps because it is too expensive or it’s a leasehold flat), developers often offer an alternative called Assisted Move.

In an Assisted Move, the developer manages the sale for you. They instruct the agents, pay the fees and push for a quick sale, but you are still reliant on finding a third-party buyer. It is a middle-ground option for those who want professional help but need the full market value of their home.

Financial Considerations and Hidden Costs

While you save on estate agent fees, you aren't exempt from all costs. You will still need to pay for:

• Solicitor Fees: You must have your own independent legal representation.
• Stamp Duty: This is calculated on the full purchase price of the new home, not the "top-up" amount you pay after the exchange.
• Survey Fees: While the developer pays for their own valuation, you might still want to pay for a "snagging survey" on your new home to identify minor defects before you move in.
• EPC and Certificates: You are usually required to provide a valid Energy Performance Certificate (EPC) and safety certificates for gas and electrics for the home you are selling.

Tips for a Successful Part Exchange

Do Your Homework First: Before inviting the developer to value your home, get three independent valuations from local estate agents yourself. This ensures you know exactly what the market value is so you can judge the developer’s offer fairly.

Clean and Declutter: Even though the developer is a corporate entity, the valuations are done by local agents. A well-presented home will always command a higher valuation.

Negotiate: Everything is a negotiation. If the PX offer is low, ask for extras in the new house, upgraded kitchen cabinets, integrated appliances or flooring to bridge the financial gap.

Check the "Hold" Period: Ask how long the developer will hold the new plot for you. Some will only hold it for 48 hours while you decide on the PX offer.

Understand the Retention: Some developers hold back a small sum (e.g., £500) until you have moved out, to ensure the old house is left clean and empty.

Conclusion: Is It Worth It?

Part Exchange is a premium service for a premium price. If your priority is squeezing every last penny out of your current property, PX is likely not for you; the open market remains the best way to find a buyer willing to pay a heart-over-head price.

However, if you value certainty, speed and a stress-free transition, Part Exchange is an unbeatable tool. It eliminates the emotional rollercoaster of falling chains and allows you to focus entirely on the excitement of your new home. For many families and professionals, the 5% discount given to the developer is a small price to pay for the guarantee that on moving day, everything will go exactly according to plan.