What is a property chain, and how do I break it?

Thinking of buying a property in a chain - or stuck in one? Read on to learn what that means and how to break it.

What is a property chain?

Let’s start by clarifying what a property chain is and how it works.

A property chain consists of multiple buyers and sellers who are all connected and dependent on the previous person to complete their sale. For example, if you’re interested in buying a property that the seller is currently occupying, and you have to wait until the seller buys their next property, you’re in a property chain.

Property chains can include several buyers and sellers. The longer the chain, the more complicated it can become, especially if any of the buyers need to secure finance to fund part or all of their onward purchase.

What is an example of a property chain?

To put things into perspective, let’s say, Arthur, who’s currently renting and is a first-time buyer, has found his dream flat. His finances are in place and his offer has been accepted by Sally. However, Sally (the current owner of Arthur’s dream property) has also found her next home, but she’s had to wait until she secured a buyer for her property. Now that Sally has found a buyer, she can organise her finances, which will then allow her to place an offer on her next home.

Here’s what a chain could look like. Note that in this diagram, the Smiths are also searching for a new home, meaning that the chain could keep going until someone breaks it by either moving into rented accommodation or buying without having to sell their property first.

Why a property chain collapses?

The longer the chain, the greater the likelihood that it could collapse. There could be various reason why this may happen, including:

• A seller struggling to find a suitable onward purchase
• Changes in a buyer’s financial situation – for example, a lender withdrawing their loan offer
• Survey results revealing substantial issues with one of the properties
• Paperwork completion and processing may take longer than expected, causing hold-ups
• Other unforeseen circumstances may arise - for instance, a buyer or seller simply changing their mind about proceeding with the sale or purchase

When one part of the chain collapses, it often means that the rest of the property transactions will take longer too. However, don’t let this put you off, as many buyers and sellers successfully complete their property sale on a property chain every year.

Can I speed up my property chain?

There is no guaranteed way to speed up completion within a property chain. However, by promptly completing and returning your paperwork, and ensuring your finances are in order, you can help keep the process moving. Good communication and regular contact with all parties involved can also help maintain momentum.

How do I break a property chain?

Buying a property that’s part of a chain may delay either your sale or your purchase. So, how can you avoid becoming involved in a property chain altogether? Here are four potential ways to break a chain:

• Consider renting your next property, before buying
• Find a chain-free seller or chain-free buyer (someone who isn’t reliant on waiting for another sale to go through)
• Choose a property that’s already vacant
• Choose to buy a newly built property

Buying a new home is a fairly straightforward way of breaking a chain as, once the building is completed, you’re free to move in.

How long does it take until completion when in a chain?

There’s no easy answer to this question, as it’s all dependent on the types of buyers and how many transactions need to take place. If you want to sell your property faster, a Traditional Property Auction and the Modern Method of Auction may be a great choice if looking for a fast sale.

Property chains can be tricky, but with thousands of chain sales completed every year and with the right estate agent, who can guide you through the entire process from start to finish, you can be sure they will keep the process moving and get your sale completed.