Buying or selling a house is one of the most stressful life events we go through. But buying and selling at the same time is even more difficult and stressful. This is because it creates a property chain, which introduces all sorts of complications.
However, things can be simplified again if a buyer or seller can break the housing chain. (This might sound like a bad thing, but it's actually a very good thing).
So what does "breaking the chain" mean in property?
In property, "breaking the chain" means that your home sale and purchase will no longer be dependent on each other. This means you can buy your next house before selling your existing one, or sell your existing house before buying another. This speeds up your move, and reduces the chances of the entire chain falling through.
Naturally, the next question is "how can you break the chain". So in this article I'll share 5 ways you can break the housing chain.
If you want to avoid chains altogether, it may be worth considering a house buying company. You can cut right to the chase and find out if a cash house buyer is right for you by taking our short quiz. Hit the button below to get started:
First, let's start by discussing why breaking the chain can be such a great idea.
1. Why break the property chain?
Breaking the chain allows you to move house much more quickly, and gives a much higher likelihood of your sale going through.
This is because in property sales either party can withdraw at any time and for any reason, right up until exchange of contracts.
We'll take a quick look at how long property chains take to complete, and how likely they are to fall through.
1.1 Breaking the chain speeds up your move
Based on a number of studies about time taken to move home, it can take around 16 weeks to buy a house if there's no chain involved.
- The first half is looking for a buyer (or looking for the place you want to purchase),
- And the second half is getting all the legal work done so the sale can complete.
But the time taken to expand rapidly when you introduce chains into the equation - even a simple chain like this one:
So breaking the chain can save you months on your moving time.
But it's not just about saving time. Breaking the chain dramatically increases your chances of the move happening at all.
1.2 Breaking the chain decreases the risk of a fall-through
We carried out a survey in 2022 and found that 31% of all house sales fall through at least once before completion. (Even if your sale is completely chain-free, you still have a 24% chance of a fall-through).
Unfortunately, your chance of having a fall-through grows as the length of the chain grows. This is because house chains create a string of transactions that all rely on each other. So if one falls through, they all go.
See how quickly the risk of a fall-through rises as the chain grows:
Because house sales can fall through at any stage, and for any reason, it's clear that the fewer sales there are in a chain, the less there is that can go wrong.
This means chain-free buyers/sellers, including those who've broken the chain, may get preferential treatment.
1.3 You may get preferential treatment if you break the chain
Simply put, chain-free buyers are more desirable to home sellers, and chain-free properties are more desirable to sellers. This can benefit you in a couple of ways.
A better deal on your sale
If you're a seller and you can offer your property with no onward chain, it may be more appealing to buyers. Buyers know they'll be able to move in sooner, and that they'll have fewer headaches with their move.
A Rightmove press release from 2021 shared that the number of buyers searching for properties with "no chain" had increased 72% over 12 months.
So chain-free properties are more desirable. And more interested buyers could mean a higher selling price for you.
A better deal on your purchase
Just as buyers prefer a property with no onward chain, sellers prefer a buyer with no chain behind them.
- Imagine you're a buyer with no property to sell, and you offer £250,000 for a property.
- Now imagine another buyer offers the same amount, but they have a house to sell.
- Perhaps their buyer has a house to sell too.
- Which does the seller go for?
It's an easy choice: The seller's going to choose your offer. You're chain free, so it's going to be faster and there's just less that can go wrong. (Check out these 9 Property Chain Problems for examples of what can go wrong with chains).
But it gets even more interesting. What if your offer was actually £245,000... that's £5,000 less than the buyer in the chain. Many sellers will still choose the chain-free buyer. It means a quicker and more certain sale for them.
So breaking the chain to make yourself a chain-free buyer can pay serious dividends.
1.4 Breaking the chain can save paying abortive costs
As we've covered, house sales fall through. It's just what they do. But fall-throughs aren't just inconvenient - there can be real financial consequences too.
A 2018 survey by Home Owners Alliance found that 51% of home movers incurred costs as a result of a failed sale. Costs can arise from wasted surveys, searches, mortgage applications, and some solicitors charge if a house sale falls through too.
In the study, they estimated the average cost of a failed sale at around £2,700 - but this seems ludicrously high to me.
Nevertheless, breaking the chain helps you avoid wasted costs on aborted sales, because it significantly reduces your chances of a fall-through.
So we've covered why you'd want to break the chain. But how can you do it?
5 ways you can break the property chain
Tip #1: Look for chain-free buyers
One way to break the chain is simply by choosing a chain-free buyer.
You won't always get the chance, but you might get this opportunity if you have several parties willing to make an offer on your home.
This is why it's important that your estate agent properly qualifies each buyer who submits an offer: You need to know how they plan to finance the purchase of your home, and if they have a complicated chain behind them.
Examples of chain-free buyers to look out for include:
- First-time buyers,
- Property investors,
- People buying second homes,
- Professional house-buying companies.
Each of these will usually be able to purchase from you without selling anything first.
It can be a good idea to opt for a buyer with no chain even if their offer is a little lower. The quicker and more certain sale can be worth the trade-off on price. Here are a couple of other ways to find chain-free buyers.
Consider selling via auction
Selling your house at auction can be a great way to get in front of chain-free buyers. Auction buyers tend to be investors or developers, and will be able to fund their purchase without needing to sell first.
Consider selling directly to a genuine house buying company
If you like the sound of the speed and convenience of selling to a chain-free buyer, it may be worth considering a house buying company. They're perfect for repairing or speeding up house sales:
- You can get a formal cash offer on your home within 24 hours,
- You'll get a guarantee the offer won't change,
- And you can select a moving date to suit you (can be as little as 2 weeks).
Although it's the easiest and fastest way to sell your house, it's not for everyone.
I designed this short quiz so you can see if it's the right option for you:
Tip #2: Look to buy a house with no onward chain
Another way of breaking the chain is to buy a house with no onward chain. If the owners of that property don't need to buy another home before they can sell to you, you'll have broken the chain.
Examples of properties with no onward chain include:
- Houses that are vacant, such as inherited properties.
- Unwanted investment properties, being sold by a landlord.
- Second homes being disposed of.
- Sellers who've made themselves chain-free. (Read on to learn more)
In other words, if the owner of the property already has somewhere else to live, they won't need to buy before they can sell to you. This breaks the chain, and will mean a faster and easier house move for you.
Tip #3: Make yourself chain free
This one's a little less obvious. You can actually break the chain yourself.
As we've covered, house chains happen when you need to sell one house so that you can buy your next, and you need to buy your next house so you can sell yours.
However, there are things you do to detach those transactions from one another. That's what we'll cover in this section.
Option 1. Move into temporary accommodation
A great way to break the chain is to sell your house, and move into temporary accommodation. This way, you can sell your house as soon as possible, rather than delaying things until your onward purchase is also ready. (This is one of the tips I share in my article about the 7 secrets to a faster house sale).
Examples of temporary accommodation that people use to break the chain include:
- Rental property. You can rent a property in the area you're moving to for 6 months (or as long as you need).
- Moving in with family/friends. If friends or relatives have extra space and don't mind putting you up they can be a good option.
- AirBnB. This one's riskier because you may end up being there for a while, but it's an option if you don't want the long-term commitment of a rental property.
There are pros and cons to consider moving jumping into temporary accommodation though.
Advantages of moving into temporary accommodation
- By making yourself a chain-free seller, you may attract more buyers. This can result in a higher selling price - which could even cover the costs of temporary accommodation.
- You buy more time to find the home you really want next. You won't need to rush just to keep others in the chain happy.
- If you sell before buying, you'll also know exactly how much you'll have to spend. You won't risk over-stretching yourself, or buying something too far inside your budget.
- You become a chain-free buyer too, which may help secure you a better deal when you find the place you want to buy.
- If moving in with family and friends, you can offer to pay them rent. It's nicer to have your cash going to help out a friend or family member, rather than a landlord you don't know.
Disadvantages of moving into temporary accommodation
- Cost. You'll end up needing to pay rent on the property you move into (unless friends or family offer you a free stay). Remember, you'll have two sets of moving costs too.
- Speaking of moves, you'll have to move house twice. Moving once is enough of a headache, but twice within a year could be a potential nightmare.
- Uncertainty. You may only plan to stay in the temporary place for a month or two... but if your purchase keeps being delayed then it could take much longer. This can cost you more in rent, or you risk overstaying your welcome with friends or family.
Option 2. If you can afford it, buy before you sell
This isn't an option for most home movers, but some will be able to buy without needing the cash from the sale.
This means you can go ahead and buy your new home before the sale of your existing one goes through.
Here are some ways you could do this:
- Get a 2nd mortgage. Speak with a mortgage broker and see if you'll be able to have two mortgages at once. It depends heavily on your situation and finances. But a good mortgage broker will help you determine if this is an option.
- Buy with a bridging loan. If conventional mortgages aren't an option, a bridging loan may be. Bridging loans are like short-term mortgages. Bridging lenders tend to be more flexible and accommodating than traditional mortgage lenders. The rates can be very high though, and you need to be very careful not to exceed the term of the loan (which is usually about 12 months).
- Buy with cash. Of course, if you have the cash lying around to buy your 2nd home, you won't need a 2nd mortgage or a bridging loan.
There are pros and cons to this method too.
The same advantages apply as above. But what are the disadvantages?
Disadvantages of buying before you sell
- Two properties mean twice the cost. You may have two mortgages to pay, two sets of council tax, insurance, and so on.
- Remember, two properties mean twice the number of potential property problems too.
- Extra Stamp Duty. You also pay more stamp duty when buying a second home. Imagine your purchase price was £300,000. When moving home normally, you'd pay £5,000 stamp duty on your new purchase. If you buy it as a 2nd home, you'll pay £14,000! (BUT, as long as you manage to sell your original home within 3 years, you'll be able to reclaim the difference.)
So this is pricey way to break the chain - but very effective if you can afford it.
Tip #4: Make another seller chain-free
If none of the other 3 tips have worked for you, my next best suggestion for breaking the chain is to try and make someone else chain-free.
This is a good option to explore if someone further up the chain is causing delays because they've haven't found where they want to buy yet.
You can ask if they could move into rented accommodation. It might sound a big cheeky, but think about it...
- If they haven't even found where they want to buy yet, it's probably safe to expect that moving day is still at least 3 months away.
- That's a lot of time for something to go wrong elsewhere in the chain...
- and if it does, then they're going to lose everything as well.
So it's actually in their interest to get moving.
The estate agent will help
You don't have to approach the seller about it directly either. You can ask the estate agent to do it. They'll be a happy accomplice because they just want to get paid. The sooner the sales complete, the sooner that happens.
You could even offer to help contribute to the costs the other party will incur if they move into a rented property. Increasing your offer slightly is probably the easiest way to do this.
It can feel uncomfortable offering to pay someone else's rent. But if it gets you moving, then why does it matter what the money's going towards?
You may even be able to get others in the chain to make a contribution as well. After all, it's going to speed up their moves too.
This can be a really effective option if there's one person really holding things up.
Tip #5: Consider using, or recommending, a chain-repair company
As we established earlier, house sales fall through. It happens. And the more transactions there are in your chain, the more likely it is that a fall-through could occur.
Rather than waiting for another buyer (who may even come with their own chain), you could opt for a genuine house-buying company.
These companies work by purchasing your home at a discount in exchange for a quick and certain sale. Their service is perfect for breaking the chain and getting things moving right away.
Remember, the discount can be spread across the chain as well. This means everyone takes a smaller reduction on the price, and everyone gets moving much sooner.
It's not the right option for everyone though, so I've designed this 2-minute quiz to help you see if it could be a fit for you:
You can break the property chain by either selling to a chain-free buyer, buying a house with no onward chain, or by changing your own circumstances so you become chain-free. For example, you could move into temporary accommodation, or take on two houses at once if you have the money.
You may be able to help make someone else chain-free too, for example by covering their costs if they were to move into a rented property.
Selling to a genuine house-buying company is one other way to secure a fast-moving chain-free buyer.
Read more here about the fastest way to sell your house.
By Matthew Cooper, Co-Founder of Home Selling Expert