What does 'Trading Gap' mean?
Trading Gap
This is the difference between the price of a property that is being sold and the price of the property being purchased when someone is moving up the property ladder.
So if a person is selling their property for £100,000 and buying for £150,000 the trading gap is £50,000. Many people moving up the property ladder would prefer to do so in a falling market because although their property is worth less, the one they are trying to buy will have lost a greater value - the trading gap has decreased.
Search Results for 'trading gap' in How to Really Buy a Property
Chapter 1:
The First Questions Are For You
"...The market then starts to fall and values reduce by 10%. Their property is now worth £225,000 but the house they want is now £405,000. The difference, known as the 'trading gap', has gone down to £180,000. A falling market has saved them money and offered a chance to make a move they might not otherwise have managed.
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Chapter 7:
Why Buy in a Falling Market?
"... want to buy has gone down by £50,000.
By choosing to buy in a falling market they have saved £25,000. A substantial sum of money. This difference is known as the "trading gap" and the more prices fall, the more a buyer will save when up-sizing.
- Why People Trade Down -
Second time..."
"... when up-sizing.
- Why People Trade Down -
Second time buyers benefit from the trading gap but there are also people moving the other direction, often those who have retired or where children have grown up and flown the nest, permanently!
Many belong to a sector where time is more..."
Search Results for 'trading gap' in Property FAQ
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