Exchange and smart

Elderly parents swapping large houses with their children is long established - particularly among aristocrats - but unrelated people are now finding that exchanging houses can save them thousands of pounds.

In Oxfordshire, two young professionals, Conrad Wolfram and Stella Hornby, searched locally for months to trade up to a bigger house from their small two-bedroom cottage in Wootton, near Woodstock, but found nothing that suited them.

Then, their 74-year-old next-door neighbour, Ruth Hirsch, suggested a novel idea: they swap homes. She thought her large Georgian house, with its acre garden, might be ideal for them, while their compact cottage was just the place she needed.

Hirsch consulted her three sons and went ahead. Each had both houses valued independently but each set of estimates turned out to be markedly different.

Wolfram, 31, is used to negotiating, running the European arm of Wolfram Research, with its successful Mathematica software. A compromise was struck but Wolfram admits he might have been harder if he had been haggling with a stranger.

Swapping houses meant there were no estate agent fees and virtually no removal costs. With a straight swap, no stamp duty is paid on the cheaper property.

He concedes swapping has pros and cons, and disaster could loom if both sides do not respect one another. Advantages include not getting gazumped, but the transaction could go wrong and people might fall out over the price, or other things, such as finding rot in the roof late in the day. Wolfram says: "Although there are negatives, the process of buying a property this way should be a lot less gruelling than other house-buying ventures.

"Once you get to the point of agreeing the details of the swap, particularly the price, it's virtually guaranteed you won't get gazumped. You can confidently invest in a survey knowing that the other person won't be pulling out because they've got a better offer."

Pushing leaflets through the doors of houses you like, proposing a swap, is unlikely to reap benefits. "You must be confident you know the person and trust each other," says Wolfram.

Hornby, who is an Oxford eye surgeon, says: "Obviously, the point is to acquire each other's houses. In a sense, other things are incidental but you can't underestimate the value of a good neighbour. " Under the right circumstances, she thinks others should try it. "When looking to move elsewhere, you always try to judge the people in places you go to, but you may not get it right and it ends up a disaster."