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A Top Property Guide To Chains

Jan 15, 2008
One of the biggest headaches you can face when buying a new house is a lengthy chain.

It will slow your transaction down and make it more likely that your sale will fall through.

Use our handy property guide to understand what a chain is, what the most common problems are, and what you can do to ensure things happen as they are supposed to.

What is a chain?

About 85 per cent of house sales in England and Wales take place within a chain, making it highly likely you will be involved in one at some point. It's a practice that is virtually unique to the UK!

The chain is a link of house sales that are dependent on each other. It starts with a first time buyer or someone getting a buy-to-let property, and ends with someone selling a property but not buying one. All the properties in-between are linked.

The entire chain has to exchange contracts simultaneously.

Why does it sometimes go wrong?

Any property guide will tell you it's a simple process in theory. In reality, chains are put together in a number of transactions over months, and that can cause a huge amount of stress. If you are the first time buyer at the bottom of the chain and so the last piece of the jigsaw puzzle, you may be completing a chain that is already six months old. What seems like a quick process to you could be the end of a long nightmare for the people at the top.

A bad survey or someone changing their mind in the middle of the chain will cause it to break. And that can cost everyone money, as they will have already paid for searches and legal fees. This is why property auctions are a popular way for investors to buy, as they avoid all of these problems.

A top property guide told us the most common reasons for a chain falling apart are deadlines for paperwork being missed, finance falling through at the last minute, hidden problems revealed in a survey, a problem with documents or gazundering. This is where a buyer reduces their offer at the last minute, virtually forcing a seller to reduce their price.

So what can I do to keep the chain together?

Well, the most obvious step is to avoid a long chain in the first place. It may be more sensible for you to accept a lower offer for your house from someone with no chain, than a higher offer by someone at the end of a long one (although as with any difficult decision, get advice from a qualified property guide first).

If you have no choice but to enter a chain, then there are some simple steps you can take to keep it together.

First off make sure everyone is ready for a sale to go through. That means having mortgage offers in place, solicitors briefed and ready to act, and target completion dates in mind.

It can be sensible to get to know your buyer well. If you can develop an open relationship, it will be easier for you to pick up the phone and get an update on the sale, rather than be constantly going through solicitors.

One property guide recommended you ask your estate agent or solicitor to inspect the paperwork throughout the chain to try and spot potential problems down the line.

Keep in touch with the key people involved in the sale. Don't be afraid to ring your solicitor regularly to chase progress - they work for you remember.

And finally, if the chain looks like it could be a real nightmare, you could always break it yourself. If you sell your house and move into temporary rented accommodation, you may find both the sale and subsequent purchase a lot easier.
About the Author
For more about property chains and more, visit the Property Today website!
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