Property chains explained: how they work and how to keep yours moving

What a property chain is

A property chain is a line of sales and purchases that depend on each other. If you are selling your home to buy another, your buyer may be selling to buy yours, and your seller may be buying somewhere else. Each of those is a link, and every link has to be ready before anyone can move.

A chain starts and ends with someone who is not selling to buy, or not buying to sell: a first-time buyer, a buyer paying cash without a sale to wait for, an investor, a developer selling a new build, or the executors of an estate selling a home that is empty. Someone in that position is often described as chain-free. This guide describes England and Wales, and chains work in much the same way in Northern Ireland.

Why everyone moves on the same day

Most people in a chain need the money from their sale to pay for their purchase, and nobody wants to be committed to buying without having sold, or the other way round. So the conveyancers in the chain usually exchange contracts (the point the deal becomes legally binding) one after another on the same day, and agree the same completion date (the day the money is paid and the keys are handed over).

On completion day the money moves along the chain, usually starting with the buyer at the bottom, so the keys for each home are released as each sale completes. The guide to exchange and completion day explains the day in more detail.

What slows a chain down

A chain moves at the pace of its slowest link. A delay anywhere, such as a mortgage offer that has not arrived, a leasehold management pack, searches from a busy council, a missing document or a buyer who is away, holds up everyone else, even if their own part is ready.

Longer chains have more links that can be delayed, which is one reason a purchase from a chain-free seller, or a sale to a chain-free buyer, can be quicker. The guide to how long conveyancing takes explains the usual timescales.

When a link breaks

Until contracts are exchanged, anyone in the chain can usually pull out, for example because a survey finds a problem, a mortgage is refused, or a buyer or seller changes their mind. When that happens, the people around them have to find another buyer or another home, or agree to wait.

Money already spent, such as survey fees, search fees and legal work done so far, is not usually refunded when a deal falls through before exchange, so ask your conveyancer what you would pay if your purchase or sale did not go ahead. With Keyfolio, every law firm on our panel, other than a firm you choose instead (your quote page says whether it does too), works on a no completion, no fee basis: you pay no legal fee if your transaction does not complete, only the disbursements already paid out for you, and on a sale whose buyer pulls out, your firm carries on with the next buyer on the same quote, and only if that buyer pulls out too can it charge for the work it has done. After exchange, pulling out is very different: a buyer who fails to complete risks losing their deposit and facing a claim for further losses.

Keeping your part of the chain moving

You cannot control the rest of the chain, but you can make sure your own link is never the one holding everyone up:

• Instruct a conveyancer as soon as your offer is accepted, or before your home goes on the market if you are selling
• Have your identity documents and evidence of your deposit ready, and apply for your mortgage as soon as your offer is accepted
• If you are selling, fill in the property information forms early and find guarantees and planning documents
• Reply to your conveyancer's questions promptly, and ask the estate agent to keep you told about the rest of the chain
• Agree a completion date that suits everyone, and do not book removals until contracts are exchanged

Ways to shorten or break a chain

Some people choose to take themselves out of a chain, each with costs and risks to weigh up:

• Selling first and renting in between, so you can buy as a chain-free buyer
• Buying before you sell, with savings or a bridging loan, which is short-term borrowing secured on property; see bridging finance
• Buying from a chain-free seller, such as a developer selling a new build or the executors of an estate

None of these is right for everyone. Talk to a mortgage adviser about borrowing, and to your conveyancer about the legal steps.

Next steps

The sooner your conveyancer is instructed, the less likely your link is to hold up the chain. Get an instant conveyancing quote to see your costs in full, including a quote for selling and buying together.