What Does 'Property Chain' Mean?
26 May 2022
In this article we discuss the term ‘Chain’, and what it means when buying or selling in Scotland.
What is a property chain?
A chain is the term used to describe the group of buyers and sellers linked by their property sales – each person is linked to the next by the property they are either selling or buying.
Usually, the chain begins with a first-time buyer or someone who does not have a property to sell, and ends with someone who is only selling their property, not purchasing another home.
Everyone in between these parties rely on those above and below them in the chain to ensure all transactions proceed smoothly.
How many people can form a chain?
There are no hard and fast rules on how many home buyers and sellers can be in any one property chain. It can be as little as two parties, for example, a first-time buyer with nothing to sell is purchasing a property owned by a buy-to-let investor, who is not purchasing another property in its place.
Sometimes, it can be as many as six or eight parties, with each party linked to another until the ‘top’ of the chain is reached, where a person is only selling their property and not buying another.
How does it work?
While in a property chain, each party’s solicitors will be working on their own sale or purchase transactions, with several people working to ensure that each transaction is aligned.
All parties need to agree on a completion date, when all transactions will become final and legally binding, and everyone can move house.
What does chain-free mean?
If you see ‘chain-free’ or ‘no upward chain’ on a property listing, this means there are no other parties involved in the chain – it will just be you and the seller, and your buyer if you are selling a property. This is normally the case if the seller is purchasing a new-build property directly from the developer, or if the property is a former buy-to-let that the owner is selling.
A chain-free purchase is generally the quickest and easiest type of transaction, with limited parties involved, meaning there are fewer potential hurdles for solicitors to navigate.
How long does a sale take in a chain?
There are no rules for how long a property sale that’s part of a chain can take – it all depends on how many links there are in the chain, and how efficient every party’s solicitor estate agent is.
In Scotland, property sales usually take on average six-eight weeks to complete, however, if there are multiple links in the chain, this could take longer. It is important to keep communication open with your solicitor estate agent to establish a timeline that suits all parties.
Why do chains collapse?
With missives being concluded early in Scotland, it is rare that property chains fall apart completely. However, with multiple parties involved and lots of details involved, sometimes things can go wrong and property chains can collapse.
If a property chain collapses, this can delay your sale, as one of the links may need to find a new property to purchase, or pull out altogether. Even though this cannot be avoided, the risks are reduced by using a reputable, experienced solicitor estate agent and by being as prompt, organised and efficient as you can – sign and send all paperwork when you are requested to do so, follow your solicitor estate agent’s advice and get your finances in place early.