Chains. They’re the bane of property professionals’ existence. Buyers despise them, agents deplore them, conveyancers dislike them, and mortgage providers aren’t exactly fans either.
However, chains do serve a purpose: they make it possible for you to leave your old home and move straight into your new one on the same day. Funds from your sale are used to complete your purchase and everything goes down without a hitch. In theory.
The weakest link
The problem, of course, is that chains aren’t as solid as their name suggests. Much as we’d like them to be as strong as steel, some prove as flimsy as a daisy chain. All it takes is something unexpected on a survey, a redundancy, or a mortgage hiccup for a chain to break. And this can happen to any link at any time. If only there was a way to avoid the stress and uncertainty...
Well, fortunately, there is. Brave souls with nerves of steel, not to mention a little imagination, can break the chain deliberately. This might seem like a risk at the time, but it can ultimately put you in a far stronger position later on. What’s more, it could save you time, money, and stress in the long run.
When to break free
Breaking the chain means that your own sale and purchase will no longer be dependent on each other. Consequently, as chains only ever progress at the same rate as the slowest transaction, ‘unchaining’ yourself will speed things up and do everyone who’s losing patience a favour.
You can also secure the sale of your current property by breaking the chain. If your buyers are piling on the pressure, you could exchange on your sale before you’ve exchanged on an onward property. This is a good option if you’re determined to hold on to your buyer – perhaps because your home’s been on the market for a while or you’ve had a particularly generous offer.
Breaking the chain is also worth considering if you’re relocating for a new job and want to cut ties with your current home.
Property chains can be emotionally and financially exhausting, especially when everything breaks down through no fault of your own. You’ll have wasted months and lost a home you’ve had your heart set on. What’s more, all that money spent on legal fees and surveys will be flushed down the privy.
Making a clean break can reduce your stress levels and put you in the best possible negotiating position to buy somewhere different in the future. After all, you’ll become a desirable ‘no chain’ buyer. This will give you an edge over rival bidders and help you secure your next property for less.
There’s another advantage to securing your sale, too. It buys time. Many people feel rushed into finding an onward property. This can lead to an expensive mistake. Breaking the chain enables you to move into alternative accommodation, take a deep breath, and find the perfect property at your own pace.
Unshackling yourself also puts you back in control. Rather than complaining about the way the conveyancing cookie crumbles, you might just a rescue a number of transactions simultaneously – thus making you the hero of the hour, whether you own a cape or not.
A chain-free existence has many advantages but there are some drawbacks, too. For example, if you can’t buy the property you’d been targeting then you’ll either need to move into rented accommodation or to stay with relatives. And you know what they say about guests and fish.
Furthermore, renting isn’t cheap. It’s traditionally more expensive than buying, although the tables have turned in recent months. It can also take several months, perhaps over a year, to find somewhere new to buy. House prices could go up during that time. Therefore, you might lose more in house price inflation and rent than you gain by negotiating a chain-free discount.
Finally, breaking the chain means that you’ll have to move twice: once into a temporary home and then again when you buy your forever home in the future. This increases your removals fees and might mean shelling out for storage as well.
Leave the chain gang behind
If you’re tempted to break the chain, but don’t fancy either renting or sleeping on your in-laws’ couch, there are a couple of alternatives: you could either extend the mortgage on your existing home to raise a deposit or apply for a bridging loan (secured against it) and pay this off when your property finally sells.
Unfortunately, these are risky (not to mention expensive) solutions; therefore it pays to think carefully before you break the chain. You could, for example, buy your new home and then rent the old one out to cover a second mortgage. But do you really need this added stress?
Consequently, breaking the chain isn’t for everyone. You’ve got to figure out whether securing the sale or moving seamlessly on one day is most important to you. It also depends on your individual circumstances. Getting out the metaphorical bolt cutters and severing the chain will be the best thing that some people ever do. But not everyone has the mettle to sever the metal. Sometimes discretion is the better part of valour.