Property Chains: What to Consider

If you are purchasing a property and it isn’t your first, chances are you will be in a property chain. For many, this can be an unpredictable time, fraught with anxiety and stress. But what do property chains actually involve and what can you do to prevent problems occurring? This article will look at what to consider when you are in property chains.

Anyone buying or selling a house can find themselves in a chain. It is a string of related sales and purchases when linked sellers and buyers rely on one particular property sale going their way in order to secure another. It starts with someone who is selling a property and ends with some who is buying a property.

How long are property chains?

This can vary widely, and there is no easy way to ascertain the average length of a chain. Theoretically, the shorter the chain, the better because there are fewer people to rely on, and less of a likelihood it will break down. That said, this does not necessarily mean the sale/purchase will go to plan. Buying a property often goes wrong because of factors outside your control.

What does ‘chain free’ mean?

Someone claiming to be chain free doesn’t need to sell their house in order to buy another. In most cases, they are only buying. This is most often the case with first-time buyers moving from a rented property or their family home. These types of buyers tend to be more attractive to sellers because it almost guarantees a quicker sale as it does not rely on multiple parties’ sales and purchases going through.

A chain free seller can also be someone who is only selling and is not buying another property, or someone moving into a new build.

Why are property chains difficult?

Chains can be problematic because they contain so many moving parts. A simple change of circumstances for one person in the chain can cause the entire process to be delayed, and sometimes even collapse altogether. If there is a weak link in the chain, someone may be slow to respond or be a poor communicator, it could inadvertently cause major delay.

Keeping the chain moving

• Ensure your solicitor is proactive and keeps you informed. If they are away on holiday or out of the office for a period of time, make sure you have an additional or alternative point of contact.
• Ensure your estate agent is proactive in their approach.
• Consider getting a bridging loan to help complete the purchase (although advice should be taken as to whether this is the best option, considering all the facts of the case).
• Keep copies of all documentation handy in case they are required.
• Be prompt with all your responses.
• Hand deliver or send documents via registered post to ensure they arrive.
• Agree dates with your estate agent and solicitor, and ensure you stick with them.

Managing a property transaction as part of a chain

The first, and probably most important step to managing this process, is to gather as much information as you can relating to your particular property chain. This will help you determine the probability that your purchase (and sale) will be successful.

It is important to try to build a good relationship with the seller and their estate agent as they will both be able to offer essential intelligence on the number of people involved in the chain, together with pointing out any potentially weak links.

Where possible, try to find out the following:

• How many other properties are involved in the chain?
• What is the status of all parties? Have they found somewhere to buy?
• What are the proposed moving timescales?
• Does anyone in the chain require a mortgage? If so, has borrowing been approved?
• Are there any obvious issues to prevent sale progression? Such obstacles include:

– Someone who cannot accommodate the proposed timescales

– A property survey revealing issues with one of the properties

– Someone having second thoughts

– Someone waiting for confirmation of a new job or school place

– Someone affected by forthcoming events, e.g., change in economic policy or election result.

Having a good relationship with all parties involved, including any professionals, will help you gather vital information on their circumstances and position. A good estate agency checks each link in the chain on a weekly or fortnightly basis to try to solve issues before they become a threat to the chain. Nevertheless, sometimes you will need to gather the information yourself in order to remain updated with the progress of the sale or purchase.

Can you avoid property chains?

It can be possible to avoid being shackled by a property chain. Here are a few ways to do so:

• Sell to a chain free buyer. We have already discussed above when this might be possible, e.g., first-time buyers. But there are also cash buyers or homeowners wanting to buy a second home to look out for.
• Buy a chain free house. New builds, a repossessed property, house whose previous owner has moved into sheltered accommodation or care home. Perhaps they have passed away. Because these owners are not buying another house, there is no onward or upward chain to break. Some new-build developers may even be willing to offer a part-exchange deal on your current home. It is important to be aware that chain free properties only make up approximately 10% of the UK market, so, in reality, they are a rarity.
• Become a chain free buyer. This can be done by moving into rented or temporary accommodation, such as staying with family or friends, and freeing yourself from the chain. This has two advantages: you will make your property more attractive to sellers and give yourself more time to find your dream home.
• Agree deadlines with sellers. If you are in a hurry to move house, try to persuade the seller to agree to a date by which they will move out. Sometimes, sellers will agree to move into rented or temporary accommodation if it means the sale will go through.

If a sale or purchase in the chain falls through, it does not necessarily mean the whole thing collapses; it may be worth considering your options. Could an alternative buyer be found for the problem property, for example?

Sometimes, there is nothing you can do to stop a chain from falling apart. No matter how much you do to mitigate against it, it is not always possible to prevent.