What is a property chain?

20th November 2020

When you are buying or selling a house and want to get ready to set a completion date it’s not possible as your conveyancer mentions to you that ‘the chain is not ready’ or worse still ‘the chain has collapsed’, but what does this mean and what is a property chain?

A ‘property chain’ is called ‘a chain’ because that is exactly how to describe it.

Chains can be long or short and comprise people who are carrying out property transactions linked to each other’s.

If you are in a chain it means that to be able to buy your new property someone else must sell it on the same day that you want to buy it and your old house must be sold on exactly the same day to ensure you have the funds to buy your new home, and so on.

So if you can think of your sale or purchase being a link in a chain and all the other people related to your transaction as the other links you will understand what is meant by a chain.

Usually at the end of a chain is someone who does not need to sell a property to be able to buy a new property. This may be a first time buyer or someone who has sold their home on an earlier date.

A chain is only as strong as its weakest link. If there is a problem with one of the links it is likely that all the other links will be affected.

Actions that break chains;

  • A buyer sometimes can’t the mortgage they expected to get – this can sometimes cause delay until a new mortgage is arranged or the buyer can’t get a mortgage and has to withdraw. This means that the chain can’t proceed until someone else is able to buy the property.
  • Someone changes their mind and withdraws from the transactions. Thy may do this because they have just changed their minds or because of other factors like losing their job or because they have found problems with the property they were going to buy.
  • When a survey is completed the buyer finds that the house is just not worth what it has been marketed for.
  • A buyer has their survey completed and finds lots of problems with the property they want to buy. They then start to re-negotiate the buying price with the seller and this cause delay to everyone else in the chain.
  • A search produces an unexpected issue. For example a mining search highlights the issue that there is a pit shaft or adit very near to or under the house.

Occasionally, if a chain breaks and one of the people in the chain does not want to lose their sale or purchase they may allow their sale to proceed earlier. In these circumstances they find some other accommodation and storage for their household effects for a short time until the remains of the chain sort out their issues and their prospective purchase property become available to buy.

Your conveyancer is experienced in managing chains and if there are any problems the best solution is to break the chain into smaller links. Your conveyancer will discuss the matter with all the other conveyancers involved in the chain to try to work out the best outcome for everyone.

If you have concerns that other linked transaction may affect your sale or purchase please discuss it with your conveyancer who will be happy to help.

Our phone number is: 0191 4555361.