The breakdown of a property chains can turn what should be an exciting time of exchanging on a property into a nightmare.

A survey of homebuyers by Which? the UK consumer champion, has found that nearly a third saw their purchase fall through after the initial offer had been accepted.

Which? surveyed 2,000 homebuyers, of which 28% said they’d had to start again or make alternative arrangements. Remember that a buyer is usually also a seller on a separate property transaction, also part of the same chain.

Unfortunately, the problem of property chains and being so reliant on other people isn’t limited to the loss of time. According to the research, only 16% of buyers were able to not lose money. Of those who had lost money, the average amount lost was £2,899 – with 5% of the parties losing over £5,000. This can include costs such as unrecovered conveyancing, surveys and mortgage valuations.

Reasons a property chain can fall apart

Here we take a further look at reasons why property chains can fall apart:

  • A buyer or seller simply dropping out for several reasons, such as not wanting to move or a change in circumstances. This is very common and usually completely out of your control.
  • Structural problems to a property such as subsidence or asbestos. The knock-on effect then leads to one of the parties involved in the transaction, possibly a lender, not wanting to proceed any further.
  • One or more parties failing to obtain a mortgage somewhere in the chain.
  • A simple but often overlooked issue is that of a house seller being unable to find a property to buy and is therefore unable to continue the sale.
  • The perceived state of the economy, and the media portrayal of the current ‘state of things’. Fear and uncertainty can absolutely have an impact on decision making. 2020 and Covid 19 highlight excellently how this can work and add further pressure.
  • Personal circumstances, such as redundancy, illness, or divorce by anyone or several people in the chain will also halt the process.
  • Gazumping, (a seller accepting a higher offer from a new buyer) or Gazundering, (a buyer reduces their offer) are genuine issues that can cause a chain to break immediately.

 The list of outcomes is almost endless, and there can be many variations of more than one scenario taking place simultaneously.

There are no official figures to show how long the average or extreme chains are. It could be as low as three, while it is common for situations involving ten or more links. The timescale on a ten-property link is unfathomable.


Good News

This isn’t all bad news, and there are solutions. Change always occurs as the property industry evolves, and we find more efficient ways of doing the same things better.

Research from estate agency Countrywide showed the proportion of properties sold as part of a chain had sunk from 90% in 2005 to 67% in 2015.

Property Chains can be costly, but they are also slow, which may be a more critical factor to your particular circumstances.

One option that is reducing the reliance on property chains, and looking for the element of speed, is to work with a property buyer. It’s at the very least worth a conversation for the knowledgeable seller or buyer, to find impartial, honest information and potential prices and timescale.

If you would like to learn more about how the property sale is evolving and continue evolving, give us a call on 01245 955 070.