When buying or selling property there are many important factors to consider – from the type of property to its location. One detail you may want to find out before making or accepting an offer is whether you are going to become part of a property chain.
Property chains are very common in the housing market within England and Wales. In this guide we will explain what a chain is, how it can affect your move and the steps you can take to manage the process smoothly.
What is a property chain?
A property chain occurs when a number of connected sales and purchases rely on one another. Each buyer or seller in the chain is waiting on another transaction to be ready to complete before they can move forwards.
For all transactions to be successful, they usually need to complete at the same time. If one link in the chain falls through, it can cause delay or even collapse the chain.
How do chains affect buying and selling?
Although chains are common, they do come with their own set of challenges. As your transaction is reliant on all participants in the chain, any issue, big or small has the potential to cause delays.
Some common problems that could disrupt a property chain are:
- Mortgage issues – this could be delays in approvals or changes in circumstance.
- Survey findings – Unexpected issues could be flagged during a survey.
- Buyers or sellers pulling out – until you have exchanged a sale is not legally binding so a buyer or seller could pull out of their agreed sale or purchase.
- Administrative delays – delays can easily be caused by slow or lack of response from other parties involved in the chain such as estate agents, conveyancers or surveyors.
The longer the chain is, the greater the risk of complications. This can lead to a lot of stress and uncertainty for all of those involved.
Tips for managing a property chain and reducing the risk of collapse
If you find yourself as part of a chain there are a few things you can do to keep that chain moving:
- Stay organised – have all your paperwork ready and finances in order.
- Secure your mortgage offer (if required)
- Appoint your conveyancer early – having your conveyancing solicitor in place before you make an offer means you will be ready to go the moment an offer is accepted.
- Keep in regular contact – make sure you maintain regular communication with all parts of the chain, this helps you to identify any issues quickly.
- Have a contingency plan – be prepared for delays or setbacks, such as putting aside extra funds for unexpected costs.
What happens if your chain breaks?
If your chain breaks it is important to find out what has happened so you can make an informed decision on whether to wait, negotiate or look for alternatives.
Depending on what has caused the issue with the chain there are actions you may be able to take:
- If your buyer pulls out – speak to your estate agent and have them contact other interested buyers.
- If your seller’s related purchase matter is delaying matters – could they break the chain and move into rented accommodation?
- If the chain collapses completely – keep an eye out for alternative properties so you have other options if the worst happens.
Make sure in any eventuality that you speak to your solicitor or conveyancer for their advice on what your next steps should be. They can explain your legal rights and any penalties that may be involved.
Alternatives to being in a chain
If you want to avoid the risk of being in a property chain there are some other options to consider:
- New build homes – Buying a new build home direct from a developer are usually chain-free.
- Sell your home first and rent – Renting short-term puts you in a stronger position to buy without the pressure of having to sell to be able to proceed.
- Look for vacant properties -Properties such as ex-rentals or inherited homes may be sold vacant and chain free.
- Consider selling to a cash buyer company – These buyers often complete quickly and remove the chain element.
Property chains are often unavoidable, but by being prepared and with the right support, you can manage them effectively. The most important step is to work with an experienced conveyancer who will guide you through the process, keep the transaction moving and handle communication across the chain.
