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How to avoid a stubborn housing chain and secure your dream home

Unless you are a first-time buyer purchasing a new build property, the chances are you will find yourself in a chain on the journey to buying your dream home.

Housing chains can be one of the most stressful parts of the house buying process, often involving upwards of five buyers and sellers, who all rely on each other for their house sales and subsequent purchases to exchange and complete. If one person in the chain drags their feet, it can lead to costly delays for everyone involved and, in the worst cases, can even result in all housing transactions in the chain falling through. As the saying goes, a chain really is only as strong as its weakest link.

So, whether you are considering your next home purchase, or you’ve already put your house on the market, follow these four top tips to avoid the pitfalls of a stubborn housing chain and make sure your dream home becomes a reality.

1. Break the chain with a bridging loan

If the chain above you is all ready to exchange contracts, but your own sale is being held up by your buyer (or someone further down the housing chain), then a bridging loan could be the ideal solution to secure your dream next home. You can take out a short-term bridging loan in a matter of weeks (with the loan secured on the property) to provide the cash you need to break the chain and purchase your ongoing home, without having to sell your current property first.

Most bridging loans should be paid back within 12 months, with interest accruing over the whole loan period rather than coming with monthly interest payments. As a result, a bridging loan can buy you time; a year’s grace period to sell your current home. Before taking out the loan, you will have to agree an acceptable plan to pay back the loan, which may be using the proceeds of the sale.*

2. Choose a cash buyer

If you are fortunate enough to receive multiple offers from different buyers after putting your house on the market, it’s wise to prioritise the offers from either first-time buyers or cash buyers (i.e. someone who doesn’t need to sell a property first before they can buy yours). While it’s likely that you will still find yourself in a housing chain above you in the process, this strategy will decrease the amount of ‘links’ you’re tied to, thereby increasing the chances of your sale going through.

3. Buy new

If you buy a new build property from a developer (rather than a home from somebody in the secondary market), you immediately place yourself at the top of the housing chain. As a result, your purchase only relies on the completion of properties below you in the chain. If you sell your current home to a cash buyer, it means the housing chain is limited to just two people (you and your buyer). And if you are a first-time buyer yourself, by buying new you cleverly avoid the housing chain altogether.

4. Don’t wait…rent!

If you find yourself in a stubborn housing chain with the delay coming from above, it could put your current house sale at risk of falling through (if your buyer runs out of patience). To avoid losing your buyer in this instance, you have the option to sell your current property and move into rented accommodation while you wait for your onward purchase to go through.

While this strategy brings with it additional removal costs and rental charges (not to mention the continued risk that your onward purchase might not come to fruition), at least you no longer have to worry about the housing chain below you, as you are now effectively a cash buyer (which is a much stronger buying position to be in).

For more information on bridging loans, or to speak with one of our sales team, click here.

*If the loan is not paid back within the agreed timescale, the property may be repossessed.

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