Your Guide to the Property Chain

If you need to sell your current house before buying a new one, you’ll probably find yourself in a property chain.

Moving home is an exciting time, especially if you have your heart set on that dream house but entering into a propetry chain can be stressful, especially if you’re new to the property market.

But what is a property chain exactly? Can you avoid a property chain and how can you protect yourself against property chain collapse? In this guide, we’ll answer all these questions and more on property chains.

If you’re wanting to make your buying and selling process as smooth as possible and protect yourself in your property chain, there’s no better way than with Jon Smith.

What is a property chain?

A property chain is a series of house sales and purchases that are linked together by their buyers and sellers.

If you’re looking to buy a new home, but need to sell your current home, you’ll become a ‘link’ in a property chain. A new link is added to the chain with every person who is buying and/or selling property.

The most important aspect of property chains is that every link in the chain is reliant upon each other to be successful. In other words, if one house sale or purchase falls through, every other house sale or purchase in that chain is also affected.

How does a property chain work?

A property chain can be made up of a number of different buyers and sellers. We’ve created an example of a simplified property chain down below.

The start of the chain usually begins with a first-time buyer. They have no property to sell and can only buy.

The second link in this chain would be the homeowner who is selling their property to the first-time buyers. They would need to sell their home in order to purchase a new property. In this example, let’s say they’re buying their home from someone recently retired.

This retiree could be selling their home to move into assisted living or moving abroad to enjoy a sunny retirement. In this instance, the property chain would end because the third person involved does not rely on the sale of their property in order to purchase a new one.

The average property chain length in the UK can differ greatly and some chains can have fewer links while others can have 10 plus links.

Thanks to modern technology, it’s possible to find out how long your property chain is. View My Chain is a service that allows homeowners and estate agents to view every property in their chain and track the progress of each sale or purchase.

It’s important to note that the more links there are in a property chain, the higher the risk for those involved if something goes wrong.

What is a chain-free property?

There are several other ways in which a chain can end and property can become chain-free. Some examples include:

  • First-time buyers purchasing a new property
  • Buyers purchasing a property that was repossessed or derelict
  • Selling your property and moving to live with family
  • Selling your home and moving into a rental property

A chain free-property is a property that does not rely on the purchase of another property in order for it to be sold.

How does a property chain collapse?

Alongside a property chain ending, a common encounter is the collapse of a property chain. This occurs when a property sale or purchase falls through. If someone can’t purchase or sell their house, each individual in the chain is affected.

There are many reasons a property chain can collapse these reasons can include:

  • A buyer failing to secure a mortgage
  • A seller or buyer backing out or changing their mind
  • Severe problems are identified upon surveying a property
  • Serious life events like divorce or bereavement
  • Failure to complete all documents by the given deadline

For many people, property chain collapses are one of the most stressful aspects of buying or selling your home and are unfortunately a common occurrence. In 2023, 35% of property sales fell through, with this in turn impacting everyone higher or lower up in the chain.

Can you fix a broken property chain?

So what happens to you? Luckily, there are a few steps you can take to help fix your property chain or at least remove yourself from the train so you can get back on track to buying or selling a property.

Communicate with your chain

The first thing you’ll need to do is contact everyone involved in your property chain. This will include mortgage and legal advisors like solicitors and your estate agents. They’ll be able to advise what the problem is and if there is any action you can take to rectify the situation.

Opt for short-term renting

Avoid the rush of finding a replacement property to buy and ensure your stability by renting whilst your house is sold. You’ll have a stable roof over your head and can remove the pressure of pleasing other buyers and sellers. If you’re new to renting or have any queries, we’ve got a brilliant renting guide that answers common questions.

Apply for a bridging loan

If you’re reliant on the sale of your property to finance your new property purchase, you might want to consider a bridging loan. This short-term loan offers you the ability to purchase a property if your chain fails and your sale falls through.

If you’re interested in a bridging loan or you’re a victim of a broken property chain, contact our estate agents at Jon Simon. We can offer dedicated and professional advise on how to proceed and offer your support on how to sell or buy a property.

Can you prevent a property chain collapse?

Unfortunately, it’s not possible for any individual to prevent a property chain from collapsing. There are however some steps you can take to help strengthen your chain or protect yourself in the event of a property chain collapse.

Invest in home insurance

Consider taking out Home Buyers Protection Insurance. This covers you for the loss of upfront expenses you’ve made to buy a property in the event a purchase falls through. When you invest in home insurance with Jon Simon, you’re given peace of mind that you’ll be protected and secure if your property chain collapses.

Buy a new-build property

Buying a new build directly from property developers is an easy way to avoid a property chain. You can also benefit from a fresh, modern property with up-to-date features.

Smooth out the property process with Jon Simon

Being in a property chain is a frustrating and largely unavoidable aspect of buying and selling a property. With a good estate agent, however, you can reduce the chance of property chain issues and save yourself time, stress, and valuable money.

At Jon Simon, we’re an estate agent you can trust. With over 15 years of experience and award-winning estate agents, we’re dedicated to making your house move as smooth and stress-free as possible.

With experts on hand in the Burnley, Radcliffe, and Ramsbottom areas we offer local and professional knowledge and help protect against property chain collapse.

Contact us on 0161 723 1155 to secure your home today.

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