What is property part exchange?

How does property part exchange work?

The PX process is designed to feel simple compared to a traditional sale, but each step matters:

1. Choose a new build from a developer offering PX on that site.
2. Valuations arranged – the developer commissions two or three independent estate agents to assess your home’s market value.
3. Offer made – based on these valuations, the developer makes you a formal PX offer.
4. Deduction applied – the value of your current home is deducted from the price of the new build.
5. Completion – you continue living in your current property until completion day, then move straight into your new home.

Because the developer is the buyer, there’s no open-market waiting game, no chain to collapse behind you, and no estate agent fees.

Eligibility rules: who qualifies?

Not every property or homeowner will qualify for PX. Developers use strict criteria to manage their risk:

• Homeowner status – you must already own your property. First-time buyers cannot use PX.
• Value ratio – your current home usually needs to be worth 65–80% of the new build’s value. If it’s worth too little, PX may be refused.
• Condition – homes with serious defects (structural issues, damp, subsidence) or poor resale prospects may be excluded.
• Leaseholds – flats typically require 80+ years left on the lease. Short leases, high ground rents, or complex service charges reduce eligibility.
• Construction type – non-standard builds (timber frame, prefab, concrete) are less attractive to developers.
• Location – remote or low-demand areas may be refused if resale would be difficult.

Example scenario: Mark and Helen applied for PX on their London flat. Although the flat was well-presented, it only had 72 years left on the lease. The developer declined the PX, highlighting the importance of lease length in eligibility.

Costs to budget for

Part exchange eliminates estate agent commission, but other costs still apply. Sellers often underestimate this.

Typical PX costs:

• Stamp Duty Land Tax (SDLT) – payable on the new build’s price, unless exempt.
• Solicitor or conveyancer fees – typically £1,000–£1,500.
• Reservation fee – £500–£1,000 to secure your chosen plot.
• Deposit – usually 10% of the balance between your PX value and the new build price.
• Certifications – EPC (£60–£120), plus boiler/gas checks if requested.
• Previous estate agent fees – if you already instructed an agent, you may still owe them depending on your contract.
• Discounted offer – expect 5–10% less than full open-market value.

Example:

• Old home market value: £250,000
• Developer’s PX offer: £230,000 (8% under market)
• New build price: £350,000
• Balance due: £120,000
• Deposit required: £12,000 (10% of balance)
• Reservation fee: £1,000
• Solicitor fees: £1,200
• Stamp Duty: £7,500 (if above threshold)
• Saving: No estate agent fee (~£3,750 at 1.5% commission).

This example shows the trade-off: you sacrifice some equity but gain speed, certainty, and simplicity.

Costs breakdown: worked £250,000 example

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*Illustrative based on typical discounts. Actual results vary by property, location, and demand.

Benefits of property part exchange

Part exchange is designed for convenience and certainty. Common benefits include:

• Guaranteed sale – avoids last-minute collapse.
• No estate agent fees – saving thousands.
• Speed – often 4–8 weeks from agreement to move-in.
• No chain stress – developers buy regardless of your buyer’s situation.
• Stay until completion – no need for temporary housing.

Example scenario: Lisa in Manchester accepted a PX offer 7% below her market valuation but moved into her new home in just five weeks, avoiding two collapsed chains. She valued certainty over maximising price.

Risks and drawbacks

While PX has strong benefits, it’s not for everyone. Risks include:

• Below market offers – typically 5–10% below open-market value.
• New build premium – new homes may fall in value after purchase, especially if bought at peak market prices.
• Limited to new builds – PX only applies when buying from developers.
• Strict criteria – lease lengths, condition, and location matter.
• Less negotiation power – developers rarely discount new build prices when PX is part of the deal.
• Exclusivity clauses – some developers require you to stop marketing elsewhere once PX is agreed.