House swap with builder

Senna

A couple i know have a house but are in negative equity, and of course they have out-grown and are looking to trade up.
They heard of some builders that might take a swap + cash, and to me it sound like a good enough plan, assuming they can agree the cash part. One house they have seen has been on the market since 2007, but the builder is "small-time" its his last house to sell and probably doesn't owe that much against it.
My thinking would be the builder might take this couples house and rent it, at least bringing in some income. It's in a very good area and if priced a small amount below average rent here, it should rent very quickly.
Without going into figures too much, this couple are in very good permanent jobs and i think between cash they have and small loan, they should be able to agree cash difference.
The question is, are these type of house swaps a good idea (in the current market)? I'd assume a few builders might jump at the chance of a cash payment plus atleast the chance of a rental income, but has anyone done it or know anyone who has?

Victor

There is little advantage in such a scheme. Any potential tax benefit was restricted about 2-3 years ago.

The real problem however is deciding on the correct value for both properties. The risk is the builder wants a high price for his property in exchange for taking on your friend's "dud" property that is devaluing.

I can't really see a builder taking on a property unless it gives him a specific advantage. During the boom years, builders were happy enough to take houses with over-sized gardens where they could build or even groups of houses where they could demolish 10 houses and build 40 apartments. I can't see any builder agreeing to that these days.

Senna

Thanks Victor, not really asking about the builders side. Its more if they do get an offer to swap, whats the drawback for the couple.
As you said its the cash balance that will make the difference, should they get a deal.