Can you part exchange when downsizing house?
We explore everything you need to know about downsizing, including whether there are 'part exchange house downsize' schemes...
Downsizing your house is generally something people associate with the more mature generation – you know the kids have left home and now there’s no need for all the spare room.
However, the introduction of the ‘Stamp Duty Holiday’ has fast-tracked a high number of people’s moving plans, pushing them towards that downsize move some years sooner.
According to The Independent, the number of people downsizing their house could rise to 11 million people within the next 20 years – now that’s a BIG number.
Alongside this, according to Zoopla, the number of new build homes built in the third quarter of 2020 increased by 50%.
It’s easy to see why anyone considering downsizing house may be considering the move to a new build.
This leads you onto thinking about ways of selling your house for a new build and you may start to wonder whether or not there are part exchange house downsize schemes.
We’re here to help answer all your questions on downsizing, including the pros and cons, AND whether or not you can part exchange when downsizing house…
What does downsizing house mean?
When people talk about downsizing house they normally mean moving to a smaller or less valuable property and it’s generally associated with those who are retired or whose children have left home.
However, this doesn’t mean downsizing house is ‘exclusive’ to these situations – for example, it maybe you’re moving family home but have realised you don’t need all the space you have.
Or, maybe you’re wanting to move to a ‘better’ location, meaning you will get less house for your money and so need to downsize.
What is the best way to downsize?
One of the best ways to prepare yourself for downsizing is to do a HUGE declutter, as there’s no possible way of being able to fit all the same stuff in a smaller space.
A big declutter session can be difficult, as it’s not something that many of us do that often. To help you out, we’ve made a list of some of our best top tips when it comes to decluttering, so you can say ‘out with the old and in with the new:
1. Make a list of all your belongings
This way you can see everything you have all in one place and then you can start ‘ticking and crossing’ what you want and have room to take with you
2. One room at a time
tackling one room at a time means that each room will get completed fully, rather than doing little bits here and there, ending in no room being fully decluttered from top to bottom
3. Keep, donate, store/skip
whilst decluttering, it’s useful for you to make three piles; one for keep; one for donate; and one for storage or skip. This way you know the purpose of each pile you’re making and will help you to easily identify what you are wanting to take with you
4. Bye bye old bills
it’s important to make sure you get rid of as much rubbish as possible, including old receipts, bank statements, and bits of paper you no longer need, as this is only going to take up room and storage space
5. Avoid renting a storage unit
when downsizing house, you may feel it’s a good idea to rent a storage unit for a little while until you’re settled and then find a home for the items in storage. However, often, there ends up being no real space for the items in storage, and so they end up constantly renting the unit for years on end
6. Give yourself time
make sure you begin decluttering a few months before your completion date. Not decluttering soon enough is only going to make you need to rush and put you under pressure, meaning you may regret some of the items you’ve thrown out
7. Get out the tape measure
make sure you measure the furniture you’re wanting to take with you. This way you can make sure when viewing your new home, you have enough space for the things you want
8. Wait before buying
you may be full of new ideas for furniture for when you get to your new house, but it’s a good idea to wait until you get there and are settled, before you start picking out new sofas! Otherwise, you may end up buying too much furniture, with nowhere to put it
9. Remember the end goal
when downsizing house, it’s easy to lose sight of the reason you’re downsizing in the first place. For example, if you’re downsizing to save money, you don’t want to get caught up in buying lots of new furniture for your new house and end up spending most of the money you were planning on saving
What are the pros and cons of downsizing?
With anything in life comes pros and cons, and downsizing is no different.
We’ve made a list so you can be aware of these ‘good and bad bits’ when it comes to downsizing house…
A smaller property = easier to manage
Gives you the opportunity to move to a 'better' location
Smaller house = smaller bills = more money to spend on YOU
Still have the BIG cost of moving house (we're thinking lawyers, surveyors, Stamp Duty, estate agent fees, all of the above)
Smaller doesn't always equal cheaper
Smaller = less space (a fairly obvious one, we know)
May require long term lifestyle changes
Can you part exchange when downsizing house?
This will depend upon the individual building development company you have chosen but as a general statement, you won’t be able to part exchange house to downsize.
Most part exchange schemes will only make you an offer if your property is 65-75% of the value of the new build.
If, of course, your property costs less than your downsized new build then there isn’t really anything standing in your way (unless for whatever reason the developer decides your property isn’t suitable).
Some housing developers, such as Miller homes, have a ‘part exchange house downsize’ scheme, but these aren’t all that they seem…
When reading the fine print, it states that when downsizing house using their part exchange scheme, your house needs to be ‘eligible’ to be able to be considered for their scheme, which is down to their opinion.
It also states that their offer can be withdrawn without notice, leaving you without a buyer – not the best place to be in when you have a house to sell before you can buy your new one!
Is part exchange on a house worth it?
This depends on why you’re part exchanging, whether you’re doing it to have no chain and a faster sale or whether you’re doing it to avoid the open market and find a buyer more easily (hopefully!)
Although on the surface part exchange sounds like a good idea, it’s important to remember a developer wouldn’t be interested in it if there isn’t something in it for them…
One step in part exchange is the developer having your house valued by three individuals so they can make you an offer based on these valuations.
During this process, you’re given no indication of how this value has been determined and they will generally undervalue your property by a fair amount.
Part exchange schemes also state that your house must be in what they deem to be ‘good’ condition and that not all houses are eligible for the scheme – this is bad news for those who want to do a part exchange house downsize as your current property shouldn’t be more than 65-75% of the value of the new build.
If you are given an offer for your property through a part exchange scheme, the offer is still subject to a survey and, in some terms of agreement, it states that the developer can withdraw their offer at any point without notice, leaving you stuck with no buyer and at no warning.
Part exchange schemes are also not open to doing a deal on a property in just any location – in other words, if it doesn’t fit in with them, they don’t want it.
It’s not all bad news though, as we have an option for when you’re downsizing house and buying a new build, without the need for a part exchange house downsize scheme…
You could sell to us! YES, really!
Here at The Property Buying Company we pride ourselves on being a guaranteed buyer who can buy your house for CASH and complete FAST – we have been known to complete in as little as 7 days (not a typo, we’re just good at quick house sales!)
Unlike a part exchange scheme, our offer isn’t subject to a survey AND your house can be in any location and any condition, so don’t worry about us being put off by a long list of repairs!
We may not offer the full market value, but we will cover all your legal fees and are happy to get our hands dirty to help with removals – just our way of saying thank you.
Why not give us a call or fill in our online form today for a no-obligation cash offer to sell your house FAST, to help you on your way in your downsizing house journey!