A property chain is when a number of buyers and sellers are linked together because each of their transactions depend on one another. For example, a buyer needs to complete the sale on their current home in order to finance the purchase of their new home.
A chain begins with a buyer who does not need to sell anything, for example, a first time buyer or investor, and ends with someone who is selling but not going on to buy another property, for example, they are moving abroad or selling the home of a relative who has passed away.
A chain is then made up of all the properties being bought and sold in between this, and can involve several properties which must all transact at a similar time so that those involved can move to their new property.
Problems occur when one link in the chain holds up the moving process for everyone, such as when a buyer in the middle of a chain suddenly finds out they cannot get the mortgage they need or perhaps they have to pull out of a sale for personal reasons. This can result in the whole chain breaking down and having to start from the beginning of the process.
In addition to a chain being made up of numerous buyers and sellers, each of these will be working with different estate agents, surveyors, solicitors and mortgage lenders. A smooth moving process relies on all of these parties working to a similar timeframe and with one another.
For some people, a property chain breaking down is not just extremely disappointing but can be disastrous if they are in a position where they have to move by a certain time.
As move closer to the end of the Stamp Duty holiday (on properties up to £500,000) which ends on 31st March 2021, more people are concerned about their transactions falling through, meaning they would have to pay more Stamp Duty.
Most recently, WeBuyProperty stepped in to help a homeowner whose buyer had pulled out at the last minute. The couple had to relocate due to a new job and needed to do so quickly to ensure their child was at her new school for the start of the academic year. They were unable to find a new buyer quickly enough so we purchased the property from them, effectively becoming the end of the chain.
Unfortunately, there is not much you can do if the property chain breaks. In addition to the disappointment, buyers can lose legal fees, surveying costs and their mortgage arrangement. If the transaction has already exchanged, the buyer will also lose their deposit.
If your transaction has slowed and you are concerned there is a chance your chain may break down, speak to your estate agent and get an update as soon as possible. If your chain has already broken and you need to move quickly, we may be able to help with a cash purchase.
Why not get in touch with a member of our team and see how we can help you!
Phone number: 0207 449 9797