Part exchange house purchases bounce back
This is according to the latest research by St Trinity Asset Management and LSL Land and New Homes, a dedicated new homes division of the LSL Property Services plc Group. St Trinity manages part exchange property disposals, and is part of the LSL group.
The number of new home purchases involving part exchange rose by 13% in 2010 to 13,732, the first increase since 2007.
The part exchange market boomed during 2007 and early 2008, with transactions hitting 36,799 and 32,959 respectively. But following the housing market downturn, transactions dropped, and by 2009 part exchange transactions had fallen by 69% year on year to 12,164.
Ian Long, managing director of St Trinity Asset Management, commented: “Part exchange transactions are still well below the heady heights they reached when market activity was at its peak, but we’ve witnessed an encouraging upwards trend in the last year.
“With an easier sale possible, no estate agency fees, and no chain on the home they are buying, part exchange is once again the most popular incentive for home movers looking at new build homes. We anticipate these schemes will become even more prevalent if house building figures continue to pick up.”
At the end of 2010, developers had approximately 1,060 unsold second-hand homes in their inventories – a 12% jump from approximately 930 the year before. At the peak of the part exchange market, developers had an estimated 2,830 new build part exchange homes on their books at the end of the financial year (2007).
Ian Long commented: “When the volumes of part exchange sales are high, it is crucial that developers are geared up to handle the sale of their second-hand stock in the most efficient way possible. This is even more vital in a market where prices are expected to fall over the course, as their portfolios will devalue the longer properties remain unsold. Where developers can centralise the property disposal process, but also retain local relationship support, they can efficiently manage the disposal of higher volumes of part exchange stock across the entire country.”