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 etc, 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 have 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.
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 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 chain below you. The parties involved in the chain below you will be dependent on the completion of your transaction.
Why Property Chains Can 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
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.
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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.
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.
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When buying a property, it’s important to work with the most experienced professionals available to help make the process run as smoothly as possible. Our dedicated team can help you through each step, connecting you with the most trusted conveyancers, surveyors and removal companies in your local area.