What is a property chain?
A property chain describes a line of buyers and sellers linked together because each is selling and buying a property from one of the others, apart from the people at the beginning and the end of the chain.
The chain begins with someone who is only buying, not selling, and ends with a vendor who is only selling, not buying. The 'links' in the chain are the people in between who need to both sell and buy a property.
In addition to the vendor, each property in a chain will usually have an estate agent, legal firm, surveyor and mortgage lender attached to it. There could easily be dozens of people involved in any one chain.
If one person in the chain forgets to sign a document, misses a phone message or does anything to slow the progress of a purchase, the whole chain could be delayed.
The chain will only progress at the pace of the slowest link; the tricky bit is knowing who that is at any one stage and encouraging them to get a move on.
How to avoid getting in a chain
With the right preparation and research, there are ways you can avoid being in a chain – or at least in a long one:
- If you're selling and have multiple offers on the table, choose a buyer who isn't in a chain themselves, such as a first-time buyer.
- If you're really struggling to get an offer accepted on a property due to being in a chain when other buyers are chain-free, it could be worth considering selling your property and moving into short-term rented accommodation, or with family or friends. You'll then be a chain-free buyer, which you can use to your advantage when making an offer, as you'll be much more appealing to the vendor. This is a risky strategy, though, as there's no guarantee on how quickly you'll find somewhere new to buy.
- If you're buying and can afford to be picky, look for properties where the upward chain is short or, even better, non-existent – eg if the previous owner has died and the property's empty, or the vendors owned it as a second home so don't need to find somewhere else to live.
- New-build homes have no upward chains for obvious reasons – and if you've got a property to sell, the developer may offer part-exchange, meaning they'll buy your old property to help speed things up. However, you may not always get the best price for your home by selling it in this way.
- If you're in a hurry, try to get the vendor of the property you're buying to agree to a date by which they are prepared to move out, whether they've bought somewhere themselves or not. Vendors will sometimes agree to move into rented accommodation to avoid risking the deal falling through.
Find out more: how to make yourself sound as appealing as possible when making an offer on a property
Why property chains can fail
Around three in 10 (28%) people have experienced a property purchase falling through, according to a 2016 Which? survey of 2,000 home-movers.
The reasons given were often related to chains, with 21% saying they'd had to pull out because their own sale had fallen through and 13% saying the seller had pulled out because the process was taking too long.
Other reasons why a chain could collapse include:
- a buyer or seller changes their mind
- a buyer or seller falls ill, loses their job or splits up with a partner
- a buyer can't get a mortgage loan to match the offer they made
- a legal firm takes too long to process the paperwork or chase up customers
- a survey reveals problems with a property.
If you think any of these scenarios could happen to you, it's worth addressing them before making an offer on a property or putting yours on the market.
If you're selling a property, make sure that your estate agent vets the buyers to make sure that none of these scenarios are likely to happen to them.
How to keep a house chain moving
Theoretically, it should be the job of the professionals to keep communicating and ensuring the right things are happening.
Some estate agencies do a good job here, with dedicated sales-progression teams employed to move things forward – it’s worth asking your estate agent whether they offer this before deciding to use them.
However, some firms aren't great at managing the process, and you may find you have to step in to keep things on track. Ask your estate agent and conveyancer whether you can help chase people who are holding things up (if you do contact other parties directly, remember that manners and friendliness go a long way in these situations).
If you're unable to contact others in the chain yourself, ask who will call them and when they'll be able to update you.
As well as chivvying others along, responding to questions and completing tasks quickly yourself will help. Make sure you:
- employ a good, experienced estate agent and conveyancer/property solicitor – ask them how long they have been doing the job for and how busy they are
- speak to your representatives regularly and ask if there is anything they or you should be doing
- get your finances in place early, especially cash for your deposit at the time of exchange
- file everything, including copies of your correspondence and notes of telephone conversations
- keep copies of your service providers' contact details at work, as well as at home, in case you need to contact them urgently
- have copies of documents that are likely to be requested to hand
- sign and return all of your paperwork promptly
- deliver documents by hand, courier or special delivery
- put clauses in your buying and selling contracts stating the dates of exchange, surveys and completion.
Correct as of date of publication.