What is a Property Chain?
A property chain is a line of buyers and sellers linked together because their transactions depend on each other. Any delays encountered within the chain will ultimately delay the other transactions. When you’re buying a property, you’re becoming another link in a property chain. If the seller you’re buying from is also looking to buy a house, then they’re extending the chain as they’re including another transaction. Being a part of a chain can become problematic if the other sales involved are delayed.
As each vendor will need an estate agent, mortgage lender, conveyancer, surveyor and so on, there are usually many people involved in one chain. This means that if one person delays the process, then the whole chain will potentially be delayed also. The chain can only progress as quickly as its slowest link, which is why it’s important to listen to the professionals involved and to gather all the necessary documentation beforehand.
Compare My Move has created this guide to aid you in the understanding of what a property chain is, how you can avoid being in one and how it affects the length of time it takes to buy a house.
How Does a Property Chain Work?
A property chain will typically begin with a buyer who is not also selling. The end of the chain will be a seller who is not buying. The other links in the chain consist of everyone else involved in the transaction - those who are both buying and selling property.
A smooth and organised property chain will only work when every link is working towards the same completion date. Each link must work within the same timeframe and work with experienced professionals to ensure fewer delays. This means that each link will be working with their own estate agent, conveyancer, surveyor and mortgage lender, increasing the number of variables involved in the process.
When working within a property chain, it’s important to know that your process relies on the actions of others within the chain. This isn’t something you can control and it may feel frustrating at times if you encounter delays caused by other parties. One fault in the link can potentially halt the transaction altogether.
An example of a break in the chain would be a mortgage block with one of the buyers. If one buyer is unable to get approved for a mortgage, it would delay both their buying and selling transactions, thus delaying the actions of the other links in the property chain. If the seller you’re working with cannot be approved for the home they’re buying, they won’t be able to move out soon enough for you to purchase and move into the property you’re buying from them.
It’s important to have clear communication throughout a property chain. You should be aware of the other links in the chain and how the process is progressing. If even one person forgets to sign a document or respond to an email, the repercussions could affect the entire chain.
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Is There an Average Property Chain Length?
There are no official figures for the average length of a property chain. Property chains can be quite long, but the average length is difficult to calculate as everyone’s situation is different. You could become part of a chain with up to 10 buyers or sellers, or perhaps a chain made up of as little as 3.
It’s important to note that being part of a long property chain doesn’t always mean that the process will be delayed or lengthy. Some chains can work quite seamlessly, it all depends on the circumstances of each individual within the chain. Shorter chains are definitely preferred, however, as fewer links mean less paperwork and less chance of delays.
Why Can Property Chains Fail?
An issue with property chains, especially long ones, is that each link is a vendor with their own team of professionals. This means that there are ample opportunities for delays to occur. As you’ll be dependent on the other transactions, whatever delays occur in other links in the chain will inevitably delay you too.
According to data by Quick Move Now, 13% of failed property sales were due to a break in the chain and 15% due to the seller pulling out after slow progress. There are numerous reasons why a chain may fail, including:
- A survey provides bad results, revealing issues with a property
- A member of the chain changes their mind about a sale or purchase
- A buyer fails to get a mortgage loan
- Someone in the chain has a change of personal circumstances e.g. they split with their partner or fall ill
- There are delays with completing the necessary paperwork
What Happens When a Property Chain Breaks?
If a property chain breaks, it doesn’t necessarily mean that the transaction has completely ended. If a chain collapses, it may simply cause delays in the process, meaning you’ll have to wait longer to complete. However, some breaks in a chain can cause the entire sale to fall through so it’s important to keep a clear line of communication between all parties involved.
In any case, a break in the property chain is never ideal and it often adds to the stress of moving house. It can feel incredibly disappointing and can even be expensive to resolve. Depending on what stage of the process you’re in, a break in the chain could cause you to lose the money you’ve spent on solicitors’ fees, property surveys or mortgage arrangement fees.
It is possible to take out Home Buyers Protection Insurance which can cover you for the loss of specific upfront fees if the transaction should fall through.
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How to Avoid Getting into a Property Chain
By avoiding getting into a property chain, you won’t be dependent on other parties’ transactions, thus limiting the number of delays you could face. Here are a few ways you can avoid being in a chain or, at least, avoid being in a long one:
- When selling a property, if you receive multiple offers, try to choose a buyer who isn’t already in a property chain. A first-time buyer would be an ideal candidate.
- As they have no upward chain, you could consider purchasing a new-build home instead. If you have an old property to sell, some developers may offer part-exchange where they buy your old property to speed up the process. However, always be wary of the price they offer.
- For those buying a property from a vendor, you could ask them to set a date in which they’re prepared to move out by, whether they’ve bought another property or not. Some may agree to avoid the risk of the sale falling through.
- If you’re a buyer struggling to get an offer accepted as you’re already in a property chain, then it could be worth considering selling your property before buying another. You would have to find temporary accommodation, perhaps privately renting or staying with family or friends. But it would mean you’d be a chain-free buyer, making yourself more appealing to sellers.
- When buying, try to find out if there are online agents selling homes elsewhere in the chain. Some online agents have few or no staff dedicated to ‘progress chasing’ - these tend to have more delays than links in the chain using traditional High Street estate agents.
- When buying a property, you could try finding one with a short or no upward chain. This would mean finding certain types of properties like ones where the previous owner has died, leaving it empty, or properties that are second homes for their sellers.
How to Keep a House Chain Moving
Generally, it’s up to the professionals to keep the process running as smoothly as possible. Good communication with your conveyancing solicitor and estate agent should help with the progression of the sale and ensure there are fewer delays.
However, there are a few steps you can take to help keep the property chain moving. If your conveyancer or estate agent is able to contact other parties within the chain, then you can find out more information concerning any delays and also ask questions as to if and what you can do to help.
To keep the chain flowing, you could:
- Use comparison sites like Compare My Move to hire reliable professionals like conveyancing solicitors and surveyors. The more experienced and qualified these professionals are, the better they can help with any issues and avoid potential delays.
- Keep a clear line of communication between you, your representatives and the other parties in the chain. Where possible, ensure you keep multiple copies of their details.
- Get your finances in order early on in the process and ensure you have the relevant documentation at hand.
- Sign and return any and all documents to your conveyancing solicitor or estate agent as appropriate.
- Inquire about adding clauses into your contracts to state the dates of exchange of contracts, property surveys and completion.
- Avoid moving house during the busy periods. Our previous data revealed that the most popular time to move house is during the summer months, especially August.
- Make sure you’re easily contactable throughout the process.
- If you have found a home you want to buy, but haven't sold your existing property, you could look into a bridging loan. This offers short-term finance before your longer-term funding - the funds from the sale of your previous home - comes through.
What Does Chain Free Mean?
If you see ‘chain-free’ or ‘no chain’ on the details of a property for sale, it means a vendor doesn’t need to buy another property when they’re selling their old one or vice versa. This means that they aren’t waiting on anyone else before completing the transaction.
If you’re a first-time buyer, then you will be considered as a chain-free buyer. If you’re a homeowner purchasing your second home directly from a developer or from someone selling their inherited home or second home, then you will also be considered as chain-free.
Being involved in a chain-free transaction is usually a better and quicker option as you’re not dependent on other parties and the progression of their transactions. This is why it's often recommended to sell before you buy a new property.
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What Does No Upward Chain Mean?
A ‘no upward chain’ is when the person you’re buying from is not involved in the property chain. This means that you don’t have to wait for them to sell their home first or complete any other transaction before you can finalise the deal.
An example of a no upward chain would be if you’re buying a new-build property directly from the developer. If you’re buying from a seller who is not moving out first or isn’t purchasing another home, then you won’t be dependent on them and therefore have no upward chain.
However, a no upward chain doesn’t mean that there won’t be a chain below you. If you’re moving house and also waiting on the sale of your current property before finalising the transaction, then you will have a property chain below you. The parties involved in the chain below you will be dependent on the completion of your transaction.
How Long Does it Take to Buy a House With No Chain?
It takes an average of 6 months to buy a house from first listing your property with an agent or property portal, to the purchaser moving in. Your personal circumstances will alter this as well as other factors, like the local property market, but this is the average our research has discovered.
However, if you’re not in a property chain, this could very well lower the amount of time it takes. Despite the steps to buying a house remaining the same, not being in a property chain reduces the delays as your purchase isn’t dependent on other transactions. This can greatly speed up the process as you’re not waiting for other transactions to finish before moving on with your own.
Next Steps of Buying a House
This article has been part of our in-depth home buying guide. In the next step of the buying process, you might be subject to gazumping, which we explore in the next article and offer guidance on how to avoid being gazumped. To find out more read what is gazumping.