Property chains happen when more than one person needs to buy or sell their house at the same time. For most of us, if we want to buy or sell our house, we will become entangled in a property chain. This will mean that your sale and purchase rely on other people’s sale or purchase to happen, in order for yours to happen. Property chains can vary in length from a short chain of three transactions, right up to double digits. Property chains can be tricky to negotiate, but understanding how they work and the risks associated with them will help to navigate your chain.
What Is a Property Chain?
A property chain happens when your sale and purchase are reliant on other people’s sale and purchase to complete. If a first-time buyer is buying a home, they are the beginning of the chain. However, for them to buy their home, that seller must buy a house. This house can only be bought if that seller themselves manages to buy a house. Breaking the chain, or putting oneself in a “chain-free” position, where you don’t need to sell a property to proceed, can be beneficial to everyone. A house sold with no upward chain means that this sale doesn’t need a corresponding purchase to go through. For example, if you are selling an inherited poperty or a buy-to-let property, then this would mean no upward chain.
Factors Influencing the Length of a Property Chain
When there are ample rental properties for sale, then property chains become less problematic, as more people can simply choose to go into rented to break the chain. However, as the rental market is extremely competitive, more and more people are forced to remain in their chains in order to move homes. Property chains can be affected by other external factors such as delays on mortgage approvals.
Average Property Chain Length in the UK
The average property chain length can start with around three properties but can be as long as 10 or more. The longer the chain the more risky it becomes, as it relies on more and more people to work together towards a single date. Property chains can vary in length, and it is a very important consideration to take into account when buying or selling a property. Always ask both your purchaser and your seller about their position, as this may influence your decision.
Challenges Associated with Property Chains
One issue with one transaction can affect the whole chain. If your first-time buyer at the beginning of the chain notices a problem with damp during their survey, then the chain will be delayed while they investigate the issue, renegotiate, or pull out. If any party along the chain pulls out, the entire chain collapses. Often the chain will decide to wait until a new buyer is found for the property, but sometimes, the chain will simply dissolve, and everyone will return to market and start again. Chains can be held up by bad communication, such as slow correspondence by solicitors, or unengaged estate agents. It is therefore vital that you ensure that you do everything that you can to facilitate your sale and purchase.
Strategies for Managing and Avoiding Property Chains
You can make a conscious decision to stay out of property chains. Choosing to buy a new-build home, moving into rented accommodation, or moving in with your family can remove you from the chain. You can also negotiate with both buyers and sellers to create a chain-free transaction. If you have offers from two parties, and one is chain-free but a lower offer, you could choose to accept this to not be in a chain. Equally, you could choose to buy a house that has no upward chain, such as a house being sold after a person has died or gone into a care home. If you do end up in a chain, communication is key. Make sure you stay in regular contact with your solicitor and estate agent so that you know exactly what is happening. If there are problems in your chain, the sooner you know about it the better. You can then make the best decision based on the available information.
How to Fix or Minimise the Impact of a Broken Chain
Communication is key. Always make sure your solicitor knows exactly what is happening so that you can deal with any potential issues as soon as they arise. If one person pulls out of the chain, but the rest of the chain is happy to wait, then you can agree to simply move the completion date back. You may decide as a chain, that you could all adjust your prices in order for the chain to proceed. For example, the first house in the chain may discover that they need to spend £20K on a new roof. If the chain all agrees to lower their prices, then the chain could go ahead. Whatever the situation, communication along the chain is essential.
Special Considerations for Buying and Selling Within a Chain
Unless you are lucky enough to have the available resources to simply buy a house, the chances are that you will end up in a chain. Short chains are generally more stable than longer chains, so it is important to bear this in mind when looking to buy. If you look at three properties and one of them is part of a very long chain, then it might be prudent to discount this property. Some people make the decision to move into rented to remove themselves from the chain and put themselves into a better position to buy. However, all of our circumstances are different, and you will need to evaluate the pros and cons of any decision that you make.
Choose Excalibur Removals
Whatever your situation, the most important aspect is communication. If you are in a chain, always discuss this with your removal company, as your completion date may move. Always keep your removal company updated with any developments in your chain. If you are looking for a professional removal company, look no further. Excalibur Removals are here to provide a professional, flexible and personal removal service for you. To discuss your forthcoming move with us, simply contact us today.