Property chain
The term ‘property chain’, sometimes referred to as a housing or real estate chain, describes a sequence of homebuyers and sellers whose transactions are dependent on one another.
Each member of the chain is both selling and buying a property, other than those at the beginning, who are only buying, and those at the end, who are only selling. There can many people involved in a property chain, each with an estate agent, solicitor, surveyor, mortgage lender, and so on.
Property chains develop because a homebuyer will generally need to sell their current home in order to finance the purchase of a new home. The seller of the home they are buying will generally require the sale to finance their own new house purchase, and so on.
A property chain can be a slow and complicated process and can frequently collapse. If one particular party is delaying the process, it will impact upon the entire chain, therefore, the chain will only progress at the pace of the slowest link. It is the responsibility of the respective solicitors to ensure that the chain progresses towards its conclusion.
Some of the variables that can result in a chain collapsing include:
- One of the buyers or sellers in the chain decides not to move.
- One of the buyers or sellers has a change of circumstances.
- One of the buyers is blocked from obtaining a mortgage.
- A property survey reveals problems.
- A conveyancer takes too long to complete the necessary paperwork.
- One of the partie’s fails to sign required documents on time.
Some property chains can be much easier than others:
- If a seller has several offers to choose from they may opt for the buyer who is not in a chain trying to sell their existing home (e.g. a first-time buyer or a cash buyer).
- A new-build home is often purchased directly from a developer so does not have an upward chain.
- There may be no upward chain if a seller is selling a home that is empty.
- If one or more parties are flexible and do not require a new house to be purchased before being able to sell their existing home (for exampe if they pan to rent).
A common phrase relating to property chains is ‘no upward chain’, which means that the seller is not waiting to complete a purchase for a new home. However, there may still be a chain below them.
The phrase ‘chain-free’ means that neither buyer nor seller are waiting for another transaction to be completed. This most commonly applies to the process that exists between a first-time buyer and a new-build developer.
[edit] Related articles on Designing Buildings
Featured articles and news
Recharging Electrical Skills in Wales
Step by step collaborative solutions.
Ireland budget announcement 2025
CIOB responds with positivity, criticism and clarity.
The continued ISG fall out, where to go?
Support for ISG contractors, companies and employees.
New HES national centre for traditional building retrofit
Announced as HES publishes survey results which reveal strong support for retrofit.
Retrofit of Buildings, a CIOB Technical Publication
Expected to become one of the largest activities in the global construction industry.
Scope determination appeals and the Building Safety Act
Process explained following release of appeals guidance.
The ECA industry focus video channel
Keeping update with the industry session by session.
Over 25 recorded informations sessions freely available.
AT Awards 2024 ceremony East London October 25th.
Revisiting the AT community at the 2023 awards evening.
The Community Housing Fund and built affordable homes
CLTN reviews the impact of the Fund and calls for extension.
The grading system of the Regulator for Social Housing
A background, an explanation and ten recent enforcements.
Construction, repair and maintenance. Book review.
Putting new life into a city with a 1900 year history.
BSRIA Briefing 2024: Sustainable Futures speakers
Redefining Retrofit for Net Zero Living 22 Nov.
Wall of support for post-Grenfell regulation of electricians
Call for a shake-up of the construction industry highlighted on radio.
Digital sustainability through future AEC tools
Bringing together industry and academia to meet challenges.