What does no chain (or chain free) mean in property?
If you’re searching for that perfect home to buy, you might have seen terms like ‘no chain’, ‘no onward chain’ or ‘chain free’ appearing alongside property listings.
Or perhaps you’re in the process of selling your own home and are wondering if it can be classed as chain free.
You might have an inkling that chain free is a good thing – but what does it actually mean?
What is a property chain?
First things first – what exactly is a property chain?
A property chain is a string of buyers and sellers linked by their property transactions. They are linked because each buyer’s onward purchase depends on the successful sale of their current place, and so on.
The property chain doesn’t necessarily cause issues with your move – and most houses bought and sold in the UK are subject to a chain. However, properties with chains carry a higher risk of your move being delayed or derailed than if it were without a chain.
What causes a property chain?
Property chains are caused by the fact that most people buy a property at the same time as selling their existing one.
For a transaction that’s subject to a chain to go ahead smoothly, the following must happen:
- the seller must be able to buy the next property they’re moving to without delay or fall-through, therefore moving out in a timely manner
- the buyer’s own house sale must go ahead as planned, thus allowing them the capacity to buy
Not only this, both the house purchase and house sale of every single vendor up the line must go ahead as planned, too. If just one transaction falls through, there is a broken link which can affect the whole chain.
The property chain can be a significant stress-causing factor in the moving process. It's partly down to the lack of control people feel when such an important time in their lives essentially relies on the actions of a series of strangers. Think about it – you never know when a link will break, bringing the whole chain to a standstill.
It’s not just a feeling either – broken property chains are a leading cause of house sales failing. With 1 in 4 property sales currently falling through before completion in the UK, that's a lot of broken chains and frustrated buyers and sellers.
What does chain free mean?
‘Chain free' or 'no chain' could refer to either the property itself or the buyer.
Chain free property
A chain-free property is one where the seller doesn’t need to purchase another home in order to sell theirs. This means they don’t need to rely on anyone else to move – they can move out whenever they want.
Chain free buyer
A chain-free buyer is a buyer who doesn’t need to sell their property before buying. This means they’re ready to move, have the funds available and are more likely to be flexible with their move-in date.
What are the advantages of having no chain?
Both chain-free properties and chain-free sellers are highly desirable in the property marketplace. Here’s why:
Less chance of the deal falling through
When buying a chain-free property, there is less chance of your purchase falling through. This is because you’re not relying on a whole host of other vendors’ sales going ahead simultaneously, reducing the margin for error.
Chain-free buyers are a much safer bet than those who are part of a chain. This is because there’s no chance of them being left in the lurch by their buyer – or their buyer’s buyer.
Flexible moving dates
A chain-free seller doesn’t need to rely on the purchase of a new place to go through before they can move out. This could be because they’re going to move into rented accommodation, relocate abroad, into a care setting, or in with family and friends. Whatever the reason for them being chain free, the part that matters is that there’s no chance of them needing to stay put after a failed purchase.
A chain-free buyer is also likely to have more flexibility with dates as they're not waiting for a sale to go through before they can move.
A swifter, smoother deal
Moving house isn’t just about having your offer accepted – or accepting an offer if you're the seller. There's also conveyancing – a process which can take weeks to complete.
A chain-free buyer won’t need to wait for a conveyancer acting on behalf of their buyer to pick over the particulars. The only conveyancing that’ll be going ahead will be the conveyancing process for them buying your property, which makes for a quicker and smoother transaction.
A better price
This is not guaranteed, but sellers will sometimes accept a lower offer from a chain-free buyer. This is because being chain-free offers that extra reassurance that it’ll all go ahead as planned, which can be worth more than a few extra thousand to savvy sellers.
How does a buyer or seller become chain free?
So, we have established that chain-free buyers and sellers are highly sought-after in the property marketplace. But is it possible to snag chain-free status for yourself?
Here are some common reasons for buyers or sellers being chain-free:
First-time buyers don't have a house to sell, so don’t come with a chain attached.
Property developers won't be moving into your property themselves and don't need to wait for a sale to complete on their end.
Cash buyers are chain-free buyers, as their purchase of your home isn’t reliant upon them selling one or getting a mortgage company to release funds.
If you’re a buyer, you can become chain free by completing your own sale and renting somewhere temporarily until you’re ready to make an offer. This works best if the property market is due to dip in a few months, meaning you can step in with a chain-free offer when prices are in a lull.
New-build homes come without an upwards chain, as you’re buying them directly from the developer or builders.
The bottom line
So, if you find yourself with chain-free status then rejoice, as you will be a far better candidate to secure the purchase or sale of your dreams than those who are caught in a chain.
With property transactions falling through at a record rate in the UK, there’s never been a better time to see if you can rid yourself of the dreaded chain.
If shaking off the chain isn’t possible for you – don’t worry. You can still protect your upfront costs, such as those hefty conveyancing fees, by insuring your house purchase or house sale with Rhino’s Home Buyers or Home Sellers Protection Insurance.
This means that if a broken link in your chain derails your transaction, you won’t be left out of pocket.