The English chain system - who benefits?

[Cruddles]

Having completed on a house move last week I'm absolutely baffled as to why the system in England exists. We were in a seven property chain, my sale and purchase were properties 2 & 3 in the chain. We sold our old house and offered on our new one in February. And yet here we are in June stressing about it going through. Delays were caused by solicitor issues on the first and last properties in the chain, causing it to be 4 hours from collapsing after taking 6 months to get to that point.

What i don't understand is who actually benefits from the chain system? Why should i be affected by property one or seven in my chain? If a chain falls apart then stamp duty is not paid, estate agents are not paid, solicitors can miss out on some or all of their potential earnings, movers don't get booked etc etc. The only party that seems to exist is a buyer or seller who wants to dick around by blackmailing others into price adjustments, or pulling out altogether, with no cost to themselves.

I'm originally from Australia and there if your offer is accepted then that's it, you're locked in. There's no chain, and it's all complete in a few weeks. My understanding is pretty much every other country has something similar. Why can't we in England? Seems like an easy goal for a political party to change.

Most people also only move along to a new home if they have a hefty bit of equity on their current home. You can easily pull some of that out to use as a deposit on the new house while leaving enough equity sitting on the current house to not upset the bank. Whether it’s called a bridging loan or a 2nd mortgage it’s still basically a home equity loan and it’s very a short time so it just shouldn’t be that expensive.

I'm not saying it current system isn't stressful, but the thought of a system where I could potentially end up owning two houses at once just... doesn't seem less stressful?

I'm in the middle of the process right now, moving from a big cheap weird flat to a bigger cheap weird house. I was not entirely confident, when I put my flat on the market, that I'd find a buyer - it's lovely, but things like having no central heating do put off a percentage of people. In the event, the market worked in my favour and it sold quickly, but that wasn't a given. The place I'm in the process of buying is a relative rarity in that it's got the space I need, and also is at a price I can afford. Not much has been coming onto the market that would work for me and I could easily have had to spend a lot longer searching. The kind of systems being described here are great if you're selling a fairly nice and saleable property, and moving to something that you have a reasonable hope of finding, but it strikes me that they'd be much more stressful if you aren't. Whatever else there is to say about our current system, I do find it reassuring that the chances of me ending up with no home at all are very very slim, and two homes pretty much zero.

And it's all very well to say that if you can't afford the cost of bridging finance you can't afford to move but it's a very nebulous cost given that you can't know how long it'll take to sell your old home. Again, if it's a naice property and the market's okay then that's not much of a worry, but I can't believe nobody's ever find themselves stuck paying for two houses for far longer than they anticipated and to be honest that would feel to me like deferring the stress to later rather than getting rid of it altogether. Whereas, with our current system, I know pretty much what all my costs are, and there's nothing that'll be hanging over me post-move.

Yes very stressful process, we moved in Feb, right up to the last minute you wonder if the chain will succeed. We were in a small chain of 4, chain of 7 must have been a real nail biting nightmare. System is overdue a major overhaul, but it never seems to happen. I would welcome an update, particularly to avoid people messing others around.

Land Registry documents are available at the press of a button (most of the time) but searches take weeks.
Each mortgage lender has different lending criteria which have to be satisfied, usually by checking the seller has/hasn't done something.
If people in this country stopped randomly extending/converting/demolishing bits of their houses without planning/building regs/breaching covenants it would be a lot quicker .
The real answer is to buy with the benefit of an insurance policy that covers the lender in the event that the seller did something that reduced the value of the house.
They were available for a while, Home Owner Protection Policies but didn't really take off.
A lot of lenders wouldn't accept them.
The banks have too much lobbying power with govt (the cladding scandal is a massive illustration of this) and vested interest in transferring all the risk to solicitors, who then cover themselves by carrying out time intensive enquiries.

The chain is not the issue, it s the burden of searches on the buyer that is. The law in England are not protecting the buyer against defect for housing purchase so the conveyancing process is long, uncertain and lead to a period where neither party are committed financially until the very end. No one would buy a car knowing they would be liable for any repair or remediation cost not known at the time of purchase, but for some reason, housing do. Most countries have a much cleaner system where an offer stands couple of weeks, then comes a 10% financial commitment while a neutral legal party is ensuring the transaction and house is in good order. All in it shouldn’t never take more than couple of months, but most importantly, shouldn’t fail 30% of the time like it does here with 100% of transaction being stressful regardless.

I was just coming by to say exactly the same as @Paulina23 It isn't the chain in itself, it's the fact it can broken at any point up to exchange with no penalty.

Also I'd like to see vendors get their own houses surveyed and available for all buyers to see prior to offer. Would stop buyers holding vendors to ransom right at the end of the process and just speed things up all round. I think they do similar in Scotland.

@CellophaneFlower
Yes in Scotland we get a home report as a seller, you can't market without one. It grades all areas of the property, roof, floors, walls, inside and out as 1, 2 or 3. 1 is good (you want all 1's) 3 is something needs attention now. The surve may point to areas that need further investigation i.e. damp, subsidence etc. then its up to the seller to rectify before going to market or taking their chances if buyers wants to investigate further. That survey also sets the price according to property condition, so I knew the market value of my property set formally not by an EA telling me what to market it at. The EA usually then knocks a couple of grand off the survey price and markets the property as Offers Over, but potential buyers can see exactly what is been valued at so can gauge how much over the valuation they want to pay.

@CellophaneFlower totally agree it should be done the way it is in Scotland. It’s absolutely ludicrous that multiple buyers (surely 10s of buyers atm) in England are paying for the same survey and often it will be the actual same report they’re sending out surely! Madness and it means you don’t find out any issues until you’re quite well into the process surely?

Here houses are valued and the value reflects any issues noted on the Home Report. It’s not ‘I have decided my house is worth £500k’ then a month down the like it turns out there’s a sinkhole and it’s worth nothing near it.

@CellophaneFlower

I was just coming by to say exactly the same as *@Paulina23* It isn't the chain in itself, it's the fact it can broken at any point up to exchange with no penalty.

Also I'd like to see vendors get their own houses surveyed and available for all buyers to see prior to offer. Would stop buyers holding vendors to ransom right at the end of the process and just speed things up all round. I think they do similar in Scotland.

I totally agree with you. You should have a sellers pack - searches, title info, survey, contracts signed etc all upfront. If as a seller you pull put you are the only one who has lost money. Its an outrageous system. The worst thing about it is that it can all fall apart right up until move day.

@readytosell - if you dont want a chain at all you have to rent. I've only ever been in a one person chain, me. I sold to a first time buyer, I bought the next house and its owner was renting. You complete both houses on the same day and the money moves through your solicitor.

I'm renting now and looking to buy chain free.