The property market is a messy place. But of all the challenges home movers face, house chains probably cause more stress and complications than anything else.
But what is a house chain?
A house chain is a series of connected property transactions. Chains occur when one home buyer is also relying on the sale of their own property before they can move. This creates a string (or chain) of linked house purchases, where each transaction relies on the success of every other transaction in the chain.
In this article we'll cover the challenges that chains present, what happens when you're in a house chain, and cover some of the other most-asked chain questions.
I've written lots of other articles about chains too, so I'll provide plenty of links to other pieces you may find interesting.
If you're selling your home you might find this free tool useful. We've designed this free quiz to help you figure out the best way to sell, and I can connect you with the leading property companies for you to sell with.
Let's get started!
1. How does a house chain work?
Let's start with some of the basics.
Who is at the bottom of a house chain?
- Property chains start at the bottom with a buyer who has nothing to sell.
- They may be a first-time buyer, a property investor, or someone buying a second home.
- The important part is that they're not relying on the sale of a property they own before they can complete their purchase.
Who is at the top of a house chain?
- Property chains end at the top with a seller who has nothing to buy.
- Perhaps they're selling a home they've inherited, disposing of an unwanted investment property, or moving into a rented property.
- The important part is that they're not relying on the purchase of another home before they can complete their sale.
You'll often sees these properties marked for sale saying "no onward chain", "chain-free", or "no chain".
Who is in the middle of a house chain?
- People who are both buying and selling a property go in the middle of a chain.
- Most people fit into this category.
- They can't sell their home until they've got another place ready to move into... and they can't buy that new home until they've got the money from their sale.
This is how chains emerge. They start with a chain-free buyer at the bottom, and end with a chain-free seller at the top. And in the middle is everyone who are both buying and selling.
The problem is that most buyers are not first-time buyers, and most selling aren't selling vacant, unwanted properties. So these strings of linked transactions emerge very regularly.
1.1 House chain examples
Let's see some simple visualisations of different house chains.
The simplest chain: just one transaction
Here we've got a chain-free buyer purchasing directly from a chain-free seller. There's just one transaction, so they aren't relying on any other sales. (Is it even really a chain?)
A short chain: two transactions
Now we see a real chain starting to emerge. We have a chain-free buyer at the start and a chain-free seller at the top. But in between we now have one party who are buying and selling. They're selling to the chain-free buyer, and buying from the chain-free seller.
Each transaction is relying on the other one in order to complete.
A more complex chain: 4 transactions
Here the complexity really starts building. We have our chain-free buyer and seller again, but now we have three other parties in between who are buying and selling.
The forking chain
You can see the complexity building as we add more transactions. But to complicate things further, chains also sometimes fork.
This happens when a buyer is depending on the sale of two properties before they can complete their purchase. This is quite rare, but sometimes happens when two partners each need to sell their house so they can buy together.
My graphic design skills are pretty much at their limit with the examples above, so I'm not going to try and create a "forking chain" visualisation... suffice to say things get complicated.
1.2 How long can house chains get?
Based on my experience, an average property chain length is probably only 2-3 linked transactions. But there's no limit to how long chains can get in theory.
What's the longest house chain? Estate agent love to share their war stories, and I've heard tales of epic house chains of 10 up to properties long. But these are few and far between.
So house chains can get really complicated! But what's the problem with them - why are property chains so dreaded?
2. Why are house chains bad?
We've established what house chains are. But why are house chains bad?
House chains make buying or selling a property much more difficult. The more houses there are in a chain, the more chance there is of something going wrong and the chain collapsing. It's also harder to maintain communication as the chain grows. This often leaves home movers feeling more in the dark, leading to more stress and uncertainty.
Ignoring chains for a second, selling or buying a home is already difficult enough:
- Finding a buyer in the first place is hard work, with estate agents only selling around half the properties they list.
- Property sales take a long time (between 14-23 weeks according to a study by TheAdvisory.co.uk).
- Sales can easily fall through too (according to 2022 House Sale Fall-Through study, 24% of sales fall through regardless of any issues with their chain).
So normal house sales are already difficult. But when you add chains into the mix, all those issues compound and sales become even more difficult.
Let's see how the chance of fall-throughs increases as the chain grows.
2.1 How often do chains fall through?
The likelihood of a chain falling through depends on the length of a chain. All figures here are based on our data taken from our 2022 survey of 305 home sellers:
- A single chain-free property has a 24% chance of falling through.
- A chain consisting of two houses has a 42% change of falling through.
- A chain with three houses has a 56% chance of falling through.
- A chain with four houses has a 67% chance of falling through.
- A chain with five houses has a 75% chance of falling through.
Check out this visualisation. It helps show how rapidly the likelihood of your chain collapsing goes up as the chain grows.
In other words, if you're in a chain with only 2 transactions, there's more than a 40% chance the chain will collapse at some point. When you get to 5 transactions, it's a 75% chance the chain will fail at some point!
Welcome to the disappointing world of property chains... where everything is more complicated, more stressful, and takes longer than you'd expect.
2.2 Communication problems in chains
Communication is one of the biggest and most underestimated problems in property sales. And unfortunately, it's another issues that's made worse by property chains.
Lack of communication can single-handedly kill a sale, even when nothing else is wrong.
I've seen this time and time again with my own purchases and sales over the years. It's pretty easy to imagine what happens:
- The seller's asking questions about how their sale's going...
- ... the estate agent is busy, so doesn't make an effort to call the buyer and find out.
- Meanwhile, the buyer's diligently working away making progress on the sale - exactly as you'd hope.
- The seller continues chasing their estate agent for updates, who continues to be unhelpful. When the agent does give updates, they give very vague, unhelpful information.
- The seller starts to imagine that nothing's really happening.
- They get progressively more frustrated and upset over the coming days, they feel the buyer's messing them around, and eventually decide to pull out of the sale... even though the buyer's doing everything they should be!
I've seen this exact sequence of events play out countless times over the years. Communication is so important. Unfortunately, estate agents and solicitors are both still very poor at communicating with their customers and with each other.
This is another of those problems that compounds as the house chain grows.
2.3 Longer chains make communication harder
Let's think through a how difficult communication within a chain can get.
Every seller has an estate agent and a solicitor. Many have a mortgage advisor and a mortgage lender too, and there's a surveyor in the background somewhere as well. Including the seller, that's half a dozen contacts for each link in the chain.
Now imagine a chain with 5 transactions. That's perhaps up to 30 people who all need to play their part for the chain to succeed. If just one drops the ball, and the ones around them aren't there to pick it up, it has a knock-on effect on every other party in the chain.
As you can see, communication within chains is incredibly complex and, to be blunt, most agents really don't do a good job of it. It's extremely time consuming, but it can make a huge difference.
My advice to you, as a home seller or buyer is this:
- Be on the phone with your estate agent. Ask them questions about how other things in the chain are going.
- For example, does your buyer have their mortgage offer yet? Does their buyer have their mortgage offer yet? Has their survey even taken place? Has the mortgage application even been submitted?
- By asking specific questions about progress and making your estate agent do the work, you'll flush out any issues much more quickly.
- This gives you a chance to resolve things and to keep the chain on track.
Unfortunately, communication isn't the only issue.
You'd hope the chain troubles subside when you finally reach completion day. But that's not the case either. Moving day when you're in a chain can be much more difficult and stressful.
2.4 Are there any benefits of a house chain?
So if house chains cause so many headaches and decrease your chance of a successful sale, why are there so many of them?
Unfortunately, there just aren't enough chain-free buyers and sellers to go around. It's also costly and inconvenient to break the chain and make yourself a chain-free home mover. So unfortunately, property chains are inevitable.
Being willing to buy a property with an onward chain gives you far more properties to choose from. And being willing to sell to a buyer in a chain gives you a choice of more buyers. This translates to more competition between buyers, meaning a higher selling price for you.
This is why chains happen. To an extent, it's because they're unavoidable. But if you do try and avoid them, it can be costly for you.
3. How long does it take to complete a house chain?
We've established what a house chain is, and why chains make home moving even more difficult.
But how long does it take to complete a house chain?
If you're in a house chain, you should expect your sale to take 4-8 months to complete. House chains can be completed in as little as 8 weeks, but they can drag on indefinitely. Many house chains collapse before they reach completion, and often have to be "repaired" several times.
Four to eight months is only a rough guide though. It's impossible to be accurate because every transaction is different and every chain is different.
Let's think through some different chains and timeframes so you know what to expect.
3.1 House sale stages
A house sale is made up of two main stages: Agreeing the sale, and getting it completed.
- "Agreeing the sale" - sellers waiting for a buyer, and buyers looking for a home.
- "Completing the sale" - getting the legal work done and the mortgage in place so the sale can go through
Let's say the stages take about 8 weeks each. (This fits in with my personal experience, and the Advisory's study referenced earlier. If anything, it's on the low side). The sale timeline would look like this:
- 8 weeks to agree the sale,
- 8 weeks to complete the sale
- Total: 16 weeks (about 4 months)
Obviously each part isn't always 8 weeks. It can be longer or shorter. But for the sake of this example, let's say it always takes 8 weeks to agree the sale, and 8 weeks to complete the sale.
3.2 Time to complete a small house chain
Now let's imagine a scenario with a short chain:
- Like last time, imagine you're a first-time buyer and you go and find the property you want to buy.
- But this time, the people you're buying from have to buy somewhere as well. They haven't found the place they want to buy yet.
- When they agree the sale with you, they start looking.
- It'll take them 8 weeks to find their new place (during this time your solicitors will be hard at work)...
- And another 8 weeks to complete it afterwards.
So in this example it takes 8 weeks + 8 weeks + 8 weeks = 24 weeks (nearly 6 months!) between this first-time buyer starting their property search, and finally getting the keys... And that's for a simple chain with no problems!
3.3 Time to complete a longer house chain
Now imagine this:
- The people selling that final property also have a place they need to buy.
- They've already found the house they want (so no long waits while they look for a property)...
- But their new purchase falls through after the first 4 weeks.
- It takes them another 8 weeks to find their next home, and another 8 weeks after that to get all the legal and financial work done afterwards.
So this chain's taken 36 weeks to complete!
Think about the original first time buyer too... They were ready to move after 16 weeks, but spent another 20 weeks waiting on the rest of the chain!
Even the owners in transaction 2 will have been waiting 12 weeks!
So chains are difficult, frustrating, and take a long time. But what can you do to reduce the headaches? (And the delays...)
4. Tips for managing a property chain
As we've covered, house chains can be unavoidable. But there's a lot you can do to manage your chain, and help keep headaches to a minimum.
Here are some house chain tips I'd suggest based on my experience over the years:
- Consider your buyer's position before accepting their offer. Going with the highest offer isn't always the best idea if the buyer's in a lengthy chain. A slightly lower offer from a first-time buyer may be more attractive when you consider the bigger picture.
- Make sure buyers are properly qualified. Your estate agent should be checking the progress of other sales within the chain before you accept an offer.
- Set target deadlines at the outset of the sale - and hold everyone to them. In my experience very few home movers or estate agents do this, but sales with no deadlines or target dates are a recipe for a disaster.
- Insist on regular communication throughout the chain. Everyone's got a lot riding on this, so make sure you're letting your estate agent know how you're moving along, make sure they're passing that message on, and make sure updates are making their way back to you as well.
- Be patient. Things take time, it's going to be a bit frustrating. Being impatient will stress you out, and turn others in the chain against you.
- But don't be too patient. Don't let solicitors take weeks to send an email, or wait months for people to find their next home.
- Finally, manage your own expectations. Expect it to be a bumpy ride. It'll make the journey a lot less stressful if you know there are going to be pitfalls and disappointments along the way.
We'll have more articles coming soon with helpful tips about managing your chain.
But what if you really don't want any chain headaches at all? In that case, you might consider opting for a chain-free sale.
5. How can you avoid house chains?
As we've seen, chains are created when one party needs to buy and sell a property.
So if you want a chain-free transaction, then you need two things:
- First, you need to be chain-free. So if you're a seller, you need to have another property ready to move into. (Perhaps a rented property, or another home you already own). If you're a buyer, you need to be able to purchase your new home without needing to sell your current one.
- Secondly, you need someone chain-free on the other side. So if you're a seller, you need a chain-free buyer (like an investor or first-time buyer). If you're a buyer, you need to be buying a house with no onward chain.
This is commonly referred to as "breaking the property chain. Check out the article below to learn more.
I've focused the rest of this section on two guaranteed ways to get a chain-free sale. (Although there are compromises).
5.1 Chain-free ways to sell your house
There are two main ways to guarantee yourself a chain-free house sale.
Sell by auction
First of all, you can sell by auction. You sometimes get a lower selling price selling by auction, but auctions have a far higher success rate and are much faster.
Because of the strict timeframes with both traditional and modern auctions, you'll always end up with a chain-free buyer too.
To start exploring auctions, check out my article on finding the best auction house for your sale.
Sell to a house buying company
An even faster way to sell is to go directly to a house buying company. (Check out this case study to learn more). Genuine companies can make you a formal cash offer within 24 hours, and buy your house in as little as 7 days. Their timeframes are totally flexible though - the idea is that they buy your house on a timeline to suit you.
Take the 2-minute quiz below to see whether a chain-free sale to a house-buying company is right for you. If it is, I'll connect you with the house buying company I trust and work with.
6. More house chain questions
I wanted to finish with some quick-fire answers to the most-asked questions about house chains.
6.1 What happens when you move house in a chain?
In the run up to completion, everyones' solicitors and estate agents will communicate and agree a date between each other and their clients.
The whole chain will have one "moving date".
The solicitors will often exchange on each sale a couple of weeks in advance. Each buyer will have to transfer their deposit to the solicitor in readiness for this.
When the deposits are in and exchange takes place, you know for sure the sale is locked in and that it's going to happen.
In the days running up to completion each solicitor will contact their client's mortgage lender (if they have one) and ask the mortgage company to send the money to their account.
This means that, when completion day arrives, all the solicitors have all the money necessary in from their client and their lender.
The transaction at the bottom of the chain is the first one to complete. The buyer's solicitor sends all the purchase money through to the seller. At this point, the sale has officially completed and the buyer can collect the keys.
The 2nd solicitor then pays all the necessary money on to the next solicitor, and the 2nd sale completes. The keys can then be released on that property.
This continues over the course of the day until the full chain has completed.
It can be a stressful and frustrating day waiting around for keys, but the advice I've given throughout this article remains true here: communicate well, and be prepared to be patient.
6.2 What does "breaking the chain" mean?
Breaking the chain sounds bad, but it's actually a positive thing. It's when something happens to complete the chain, and stop it from carrying on indefinitely.
- If a seller at the bottom of a chain agrees a sale with a first-time buyer, they have "broken the chain". It stops with that first time buyer, so the chain is broken.
- If a seller at the top of the chain decides to move into a rented property rather than buy another home, they have "broken the chain".
- If a buyer decides to take out another mortgage rather than sell their own home first, they too have "broken the chain".
Breaking the chain is anything that stops the chain from carrying on.
6.3 Can you buy a new-build in a chain?
You can buy a new-build property even if you're in a chain. Home builders know that in order to sell many of the properties they build, they will often need to sell to people who have their own home to sell. I suggest explaining your position to the sales negotiator at the house builder, and they'll be able to work with you on how to proceed.
6.4 More property chain resources
If you're about to embark on a transaction involved in a property chain, you may want to keep reading to study up. Here are some articles I'd recommend:
- At what stages can a house sale fall through?
- 9 common property chain problems
- What percentage of house sale fall through?
By Matthew Cooper, Co-Founder of Home Selling Expert