Property chains form as a result of having a sequence of property buyers and sellers whose deals become interconnected through circumstances.
It is an unfortunate (and often infuriating) reality that the financial interconnectedness of arrangements within a property chain can mean that issues affecting a single deal might significantly impact all or most other links in that chain.
The nature of property chains is such that the successful completion of one property sale is a prerequisite for another purchase to conclude, and for a whole sequence of property transactions to move ahead without the kind of hold ups that, if not resolved, might cause a series of property deals to fall through.
It is generally assumed, and recent research suggests, that roughly one in every three property deals agreed in the UK will fall through before being concluded for one reason or another.
Causes of chain breaks
Transactions involving changes to residential property ownership are commonplace in all parts of the UK but they are nevertheless unavoidably complex in nature. In practice, they tend to involve a significant amount of paperwork, even in the most straightforward of cases.
That relative complexity is why it’s essential to enlist the services of a reliable and reputable conveyancing service provider, to give yourself the best chance of having your property acquisition process run smoothly.
Even relatively minor issues that arise within the context of any link in a property chain can cause delays, which can then set back all deals within a chain and potentially cause their collapse. Chains naturally vary in length, with the chances of issues arising generally increasing along with the number of links in the chain.
Specific reasons why a chain might collapse include a prospective buyer:
| Being unable to finance in practice a deal they’ve committed to in theory |
| Changing their mind about acquiring and moving into a specific property |
| Threatening to back out of an agreed deal because they want to secure a lower price |
| Reviewing the results of property surveys and demanding a renegotiation |
Other reasons why a transaction might fall through can include a seller:
| Accepting a higher bid from an alternative buyer |
| Unexpectedly deciding they want to continue living in their current property after all |
| Losing their job or suffering a bereavement that changes their circumstances |
| Discovering major problems with the property they were intending to buy |
Overcoming and avoiding these issues
The collapse of property chains can of course be hugely frustrating for the various parties involved and even somewhat disastrous financially or personally in certain situations.
It can, therefore, be well worth doing whatever possible to avoid finding yourself facing a property chain collapse scenario.
As a buyer, there may well be nothing that you could’ve done to prevent or avoid such a situation but it can also be valuable to know and to feel that you did absolutely all that you could to see your property deal conclude.
So how might you do that from a buyer’s perspective, well…
Communication is key – this is true so often in life but rarely more so than in the context of property transactions. Being across as much detail as possible can be helpful and communicating well with your own conveyancing firm, and all other parties involved, can be the difference between seeing deals conclude and having them collapse. Issues can arise and be resolved, or they can be overlooked for too long.
Negotiate flexible timeframes – The more timescale flexibility that you can introduce into your property deal situation, the greater the scope for major or minor issues across the property chain to be resolved in ways that keep a sequence of transactions on track.
Consider bridging loans –As with timeframes, the more flexibility you can secure for yourself financially as a buyer, the greater the chances that your deal can be concluded. Bridging loans offer potentially crucial financial flexibility for buyers keen to get a deal done and move on, and move in.
Positive proactivity
Whatever the length of your property chain and whatever issues may or may not arise, adopting a generally positive and proactive approach to problem solving can make a real difference.
It is also essential to work closely and collaboratively with conveyancers and solicitors that are good at their jobs, suitably experienced and every bit as proactive in the scenario as you are, if not more so.
Home Legal Direct is a leading conveyancing network, enabling homebuyers across England and Wales to access quotes from high calibre service providers in a matter of seconds.
You can also contact Home Legal Direct to help safeguard your property transaction at any stage of the process.