With the housing market in turmoil and successful sales thin on the ground, why not swap your home instead?
This article was first sent to readers as a '360 degrees' email.
The latest report from the Council of Mortgage Lenders (CML) has revealed that about 900k home-owners have been sent into some level of negative equity due to falling house prices.
Hips changes
And as if that wasn't bad enough, those needing to move are discovering it could now cost more than they'd thought. While sellers were previously given a grace period before having to pay for their Home Information Pack (HIP), as of 6 April you need to have the pack ready before your home can be marketed, meaning you'll have to shell out between £200 and £400+VAT.
Add that to the estate agent's fees, stamp duty and other fees, it's easy to see how moving home can easily cost tens of thousands of pounds. And that's not even including the fact that a whopping number of house sales fall through each year due to chains collapsing, adding to the expense.
Can we reduce our costs?
We can certainly try to reduce our costs by negotiating the price of the property we wish to buy in order to stay below a Stamp Duty band. We can shop around for our Hip and moving costs, and barter hard to reduce the fee we'd need to pay our estate agent.
But there is another way to save potentially thousands - why not swap your home?
Swap your home instead!
Yes, I know that the last time you remember swapping anything was in the school playground, but house swapping is big business. And yes, it really does mean swapping your home with someone else (and leaving out those expensive middle-men).
It makes good sense, too. By not marketing your property through an estate agent you could save anything up to 4% in fees, plus you may not need to commission a Hip (which many see as pointless). You won't have to deal with a chain, and things can happen pretty much as quickly as you'd like.
And the best bit is you may be able to avoid having to frantically clean and tidy your home for months in preparation for a viewing that may or may not happen!
When you take into account how slowly things are currently moving in the housing market, swapping could be a great solution.
Private swap
So how can you swap? Well, the best way, is of course, privately. If, for example, you and your cousin wished to swap houses (of equal value) and spoke about this directly, without having involved a third party, you would need to each acquire the services of a solicitor, agree the price of each and let the conveyancing commence.
If your house was worth less than your cousin's, your solicitor could arrange for you to pay him a mutually acceptable sum to even up the difference.
Not only would you save on the estate agent fees, as your property wasn't marketed you also wouldn't need a Hip - so you could potentially save thousands.
Home-swap company
Of course, cousins living in suitable properties (and willing to swap) can be thin on the ground. In this case, you could sign up to one of the many house swapping sites to see what's out there. Websites such as homeswapper4sale, easyhouseexchange and even humble Gumtree list properties all over the country (and indeed the world).
You'll usually need to pay a fee (roughly £50 for 3 months) to list your property on the site. Then, all you have to do is post some photos and the particulars of your home (location, number of bedrooms etc) and the price range and details of the property you would like to move to.
Interested swappers get in touch with each other, and when a suitable swapee is found you can arrange viewings, conduct a survey and, all being well involve your solicitors.
Temporary swap
And interestingly, swaps don't even have to be permanent. Some companies can facilitate home swapping for those needing to on a temporary basis. For example, if you needed to move to London for a year for a job contract and could find a suitable swapper, you could switch properties for a year and pay rent to each other.
Sounds easy, doesn't it?
But while permanent home swapping may seem simple and logical, there are a few things to bear in mind.
But watch out for...
For a start, if you're marketing your property in any way (including advertising it on a home-swap site) you will still need a Hip. So you won't save money there.
Valuing your home may be tricky. While you may automatically turn to an estate agent this could be a bad move as, depending on its terms and conditions, if you decide to use its services too you may still be liable to pay its fee (even if you successfully swap your home).
And as home swapping is still relatively unusual, many solicitors charge a fair bit more for the conveyancing involved, arguing that extra work is needed to ensure everything is correct. And don't think you can get away with fiddling the Stamp Duty payable by swapping, either - your solicitor will want to be able to prove you've had more than one legitimate valuation carried out.
What's more, your lender may have objections to a home swap.
But on the plus side, with many sellers being forced to reduce prices or even shelve plans to sell due to the difficult housing market, swapping your home could be a good solution.