How a Property Chain Works

What is a property chain?

A property chain is a series of linked house purchases that all need to take place to complete the chain. If you are just buying, you will be at the beginning of the chain. If you only need to sell your property, you will be at the end.

Property chains exist because, once you’re on the property ladder, you will usually have to sell your home to buy another house or flat. So, if your sale falls through, you may not be able to buy the property you want. Unless, of course, you can find another buyer quickly.

If you are buying from someone whose purchase stalls, they may also decide not to sell. People in the middle of a chain are therefore the individuals most likely to have a problem. In fact, both the availability of the property they want to buy and the sale of their current home depend on other transactions going through.

How long does it take to buy a house in a property chain?

Property chains do not always mean it takes longer to buy a house. If everything goes smoothly, the sale could go through within a few months. But if things go wrong, you could be waiting a long time. So, it’s wise to give yourself at least six months to buy a house in a property chain.

The more sales that need to go through, the longer the list of reasons the chain could collapse. These include:

• One of the buyers is unable to get a mortgage

• One of the sellers decides they no longer want to proceed

• One of the parties falls ill or loses their job

• One of the property surveys reveals unexpected structural problems

A property chain involves lots of people, including other buyers and sellers, as well as their estate agents, mortgage lenders, solicitors, and surveyors. Therefore, the process can easily be delayed by holidays or missed phone-calls. For this reason, buying in a property chain can take anything from three months to a year or more. The latter, though, isn’t common.

What can I do if my property chain breaks?

When you are in a property chain, one sale not going through can quickly cause the whole chain to collapse. In most cases, this means looking for an alternative house to buy and/or putting your home back on the market. It will usually also mean losing any money you’ve already paid out in related costs.

If the break is at your level, you may be able to take action to prevent it ending the whole chain. For example, if your buyers drop out because their mortgage is not approved, you could ask your estate agent to get back in touch with anyone else who made an offer for your property.

If it’s at another level, it’s vital to find out what the problem is. This way, you can decide whether to keep waiting or cut your losses and pull out of the chain.

You can’t always stop a property chain collapsing, but ways to reduce the risk include:

• Having your savings readily available to cover all related costs (stamp duty, solicitor’s fees, etc.)

• Getting a watertight mortgage-offer

• Buying a property that is chain-free or is part of a short, upward chain

• Choosing a buyer who is not in a property chain

• Selling your property and living in rented accommodation while you look for a new home

• Buying a new-build property

How can I speed up a property chain?

Good communication is key to speeding up a property chain. You should stay in regular contact with your solicitor and estate agent. If things aren’t moving, ask if you can contact the other people involved directly.

Other measures that can speed up a property chain include:

• Getting your finances sorted as early as possible

• Signing and returning all the relevant paperwork immediately

• Using courier services or recorded delivery to prevent any delays

• Keeping copies of all your correspondence

• Including date clauses that give a timeframe for completion in the contract

What does 'chain-free' mean?

When you are looking to buy a property, one that is advertised as ‘chain-free’ is one that is available for you to move into as soon as you are in a position to buy it. This is an advantage, as it means there is no chance of the purchase being scuppered by the seller’s purchase falling through.

There’s still no guarantee the sale will happen. For instance, the seller could decide to take it off the market. Alternatively, the survey could reveal problems that make you reconsider buying it. But the chances of you being able to buy the property are higher, nonetheless.

Just remember that sellers with a no-chain property may be less inclined to accept a lower offer, as they’re in less of a rush to sell. Conversely, if you are selling a house or flat, advertising it as chain-free should help you to attract more potential buyers. It will also give you more bargaining power when it comes to getting the price you want.

First-time buyers can also use the fact they do not need to sell a property to buy as a negotiating tool. The most common form of chain-free house purchase is when a first-time buyer chooses a new-build property.

What does 'no upward chain' mean?

A property with ‘no upward chain’ is one being sold by someone who does not need the sale to go through to buy another home. This could be the case when:

• The property is a second home

• The property is a rental house or flat

• The seller is moving in with a partner

• The seller has inherited the property

Do estate agents have an influence on a property chain?

Since estate agents act and work for the seller, it’s their aim to ensure that the process is as smooth as possible. But this doesn’t mean they will refrain from slowing it down if a more profitable opportunity arises for their client.

In fact, if a new buyer shows interest and comes in with a bigger offer, it is likely that the estate agent will disrupt the process and seek to secure the higher sale price.

What is the 'top' and 'bottom' of a property chain?

The ‘top’ of a property chain usually indicates the last property and final phase of the process, where the seller isn’t seeking to buy a new house. This could be, for example, the case of older homeowners who may be moving into care.

As for the ‘bottom’ of a property chain, instead, it generally indicates the first property and initial stage of the process. For instance, it could be the case of a first-time buyer who is hoping to secure a property and doesn’t have a ‘dependent sale’ of their own.

Do all houses in a property chain exchange contacts on the same day?

In most cases, yes. If there is a dependent chain in place, is it likely that all contracts will be exchanged on the same day.

What’s more, the same move-in date will probably be set for everyone too.

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