What Does Chain Free Mean When Buying a Property?

When you’re looking to buy a property , seeing in the words “chain-free” can be the difference between a quick and simple transaction and a complex, lengthy one. Understanding what it means, for both a buyer and a seller is important if you’re thinking of moving. 

“Chain free” can be used to describe a buyer, or a seller or a type of property. 

What is a Property Chain?

A property chain is a string of linked house sales, where each transaction depends on the preceding one proceeding. If any one of the properties in the chain doesn’t go ahead, the chain collapses. 

For example, if you want to buy a new home, the seller of that home will likely be buying another property to move into. This seller might, in turn, be relying on their seller’s purchase, creating a chain of transactions. Each link in the chain represents a buyer and seller dependent on the sale and purchase of their respective properties.

What Does No Chain or Chain-Free Mean When Buying or Selling a House?

A seller will advertise their property as “no chain” or “chain-free” if the sale of the property isn’t reliant on the seller buying another property at the same time. This simplifies the process quite a lot and can speed it up a fair bit; it often happens if:

• The seller is moving into rental accommodation.
• The property is new-build.
• The property is being sold by a company.
• The property is being sold at auction
• The property is being sold by an executor of an estate (following the previous owner’s death).

For buyers, a chain-free property often means a quicker, less complicated purchase process.

A buyer can call themselves “chain-free” if they aren’t relying on the sale of another property to provide them with the funds to buy. They might also describe themselves as a “cash buyer” if they have the cash funds available to buy immediately and aren’t waiting on any third-party finance (like a mortgage) or the sale of another property before they can make a purchase. 

Should I be Worried About Property Chain Issues?

Property chains can be troublesome because they can make transactions more complicated – issues in one part of the chain can delay or even collapse the entire sequence. Common problems include:

• Buyers or sellers pulling out
• Buyers or sellers slowing down the chain for everyone due to last minute renegotiations
• Financing issues, e.g. mortgage lenders changing their offer or chains taking so long that the original mortgage offer lapses (common after 6+ months). 
• Survey or legal problems.

While property chains can cause stress, there are things you can do to avoid them or repair a broken chain; we look at this a little further on.

What Is the Average Property Chain Length?

The length of a property chain can vary widely. A chain often has three to four properties but sometimes they can be much longer with even ten or more linked transactions. First-time buyers, who by definition have nothing to sell, are helpful ‘ends’ to a property chain, as are people who are buying or selling homes they don’t live in. 

How often do property chains collapse?

On average 1 in 3 property chains collapse. This figure has been fairly consistent for years. The most common reasons why chains collapse are

• The buyer changes their mind and pulls out
• The buyer can’t get a mortgage
• Problems with the survey lead to a ‘down valuation’ and the buyer pulls out
• The seller has problems with their onward purchase
• The buyer is gazumped by another buyer who offers to pay more
• The buyer tries to gazunder the seller and reduce the purchase price at the last minute

What Are the Benefits of Being a Chain-Free Buyer?

It’s quicker to buy a house when you’re not waiting for someone to buy yours so the transaction can be completed much faster. While that is a benefit in itself, it also means you as a buyer are more attractive to sellers, so you may find the offers you make get accepted more (even if they are slightly lower!). With you not being reliant on people buying your house, there is less risk of your new purchase falling through because of issues elsewhere in the chain. 

How to Avoid Property Chains

If You’re Buying:

Probably the easiest way to avoid a property chain when buying is to look specifically for listings that explicitly state they are chain-free or have ‘no onward chain’. One simple way to do this is to look at new builds. Also, if you’re in a position where you are a firs time buyer or can be a cash buyer, you’ll avoid a downward chain.

If You’re Selling:

If you’re looking to sell quickly and without fear of becoming stuck in a property chain, you can move into temporary accommodation, whether that be renting or staying with family or friends. This means you don’t need to time your sale so it coincides with the purchase of a new place. Alternatively, you can sell to a house buying company, such as House Buyer Bureau, who specialise in buying properties chain-free for a quick sale.

Can I do anything to reduce the length of my property chain?

While you can’t control the length of a property chain, you can take steps to minimise its impact. The best thing to do is to work with reliable professionals who know what they’re doing and can keep your part of the chain moving forward. 

You should also have all your paperwork ready, get your financing (whether that’s a mortgage or other finances) in order and communicate regularly with your solicitor and other parties.

Your estate agent should provide regular updates on progress and will act as a key contact point across the property chain. If you aren’t getting regular communication from them then you should consider changing agents. 

If you need to sell quickly then consider selling to a property buying company as they work with specialist solicitors and surveyors who can work very quickly. The trade off you will make is that you will get less money for your property using this route. 

How to fix a broken property chain

If you are the seller then firstly, figure out what’s caused the chain to break. Has the property been down valued, or has your buyer lost their finance? Has someone higher up the chain decided not to move out of their home, or have the people you were buying from been gazumped and now they have to start looking again?

If your buyer now can’t afford the asking price, you could ask them for their “best and final” offer to see if you can agree a price that suits you both, or put your place back on the market. 

Going back on the market is likely to add weeks or months to the sale, unless your agent can find you a cash buyer who is ready to proceed now. 

You may decide you don’t want to wait any more (or risk losing buying your dream home) and sell to a quick house sale company for the speed and certainty. Here at House Buyer Bureau, we can buy properties in as little as 7 days.

If you are the buyer and the house you’re looking to buy is now no longer an option, you can look at other properties to buy (perhaps those without onward chains), or you may want to move into rented accommodation to ensure you don’t lose the buyer for your existing property.

If a sale further up (or down) the chain is in jeopardy, you could recommend a quick house sale company to keep the rest of the chain intact. A house buying company will buy at a discount, but if you can agree to share that discount across the entire chain there is every chance you can keep your property chain together and everyone can move. 

How quickly can you buy a house with no chain?

Buying a chain-free house can dramatically speed up the process. In some cases, it can be completed in as little as four to six weeks, assuming all the legal and financial elements go smoothly.

FAQs

How can House Buyer Bureau help?

If you’re worried about whether you’ll be stuck in a property chain for months and months, or if the chain you’re in has now broken, it might be worth exploring alternative ways to sell. You could consider selling to a property buying company like House Buyer Bureau. We can buy a house in as little as 7 days, buy homes in any condition and have our own cash (so there’s no waiting around for finance checks!). Get your no-obligation quote today. 

We work closely with our sister company HBB Solutions who specialise in stepping in to by properties when chains are at risk of collapsing. They work in partnership with many of the major house builders, retirement home developers and estate agents to offer their property buying expertise to their customers.