Why does the UK have property chains?

[mjf981]

For full transparency, I lived in the UK for most of childhood, but I moved after school and have never bought property there.

I have however bought in Australia. It's very straightforward (though horrendously expensive). You offer privately, or buy at auction. To seal the deal, you put down a 5-10% non refundable deposit, and 6 weeks later you exchange. If you pull out for any reason, you lose your deposit. There is no such thing as a chain here - if people have nowhere to move to they move in with family, rent short term etc.

I was talking to my cousin who is selling and buying in England at the minute. It's been a nightmare with 2 collapsed chains and has been ongoing for almost a year now. She is tearing her hair out and has vowed never to move again when this is all over.

Why is it so complicated in the UK? Why do chains exist? What is the advantage to them? How can other countries manage without them and yet the UK does not? It sounds ever so stressful to have it set up this way.

Not to mention horrendously expensive and stressful...

We don’t have the kind of rental market that allows us not to have chains. It’s not set up for short term lets. When we wanted to move, there was literally nothing available short term that would have suited us. Our only option would have been very expensive airbnbs. Add in that we have a cat and almost no rentals are pet friendly and it’s even harder.

We were moving to be in the right place before school applications. That only gives us a very small area we could get a rental in, to be better off that just staying put in a chain.

We are moving and haven't yet got a buyer for ours or found a property we want to buy. I have thought about going into rented if we do sell, but we are going to port our (very low rate) mortgage and going into rented without somewhere to buy would mean we would lose this mortgage. So we will be stuck trying to find a buyer and a property to buy at the same time. We don't really have a choice - the chain has got to be delayed at some point

Because we're stuck in the 1800s and powerful people are afraid of change.

Same reason why we still have bishops in politics and the House of Commons sounds like a sheep auction when the MP's get too excited....

Sorry Op. I needed a rant after losing a lot of money on failed house buying last year ☹️

My understanding is that (1) in Scotland you remain responsible for a period after the sale for things that go wrong eg boiler and (2) far more properties than in England go on a best bid basis, so the offering process may result in paying more than ideal to secure somewhere.

Do correct me if I’m wrong though!

Both of these sound stressful to me. I guess we all get used to the ups and downs of our own systems and no system is perfect.

I’m not from the UK originally. I think if sellers in England should do all the searches and get a survey themselves to be ready for a buyer - then the process will be much quicker and result in fewer surprises and chain collapses. It will offer a lot more transparency and buyers will know exactly what they are paying for, saving the renegotiation after surveys. I can’t for the life of me understand why it’s on buyers to purchase a survey on the house and do all the searches when this information should be coming from the vendors themselves. And if the purchase doesn’t go through the next buyer needs to spend money on exactly the same searches, survey and solicitors. I guess the logic is it’s an industry that prefers people to keep shelling out.

Last when we were buying we spent money on solicitors, on a survey, on searches, not to mention being emotionally invested only to find out in the survey that the house had spray foam insulation and no bank would lend on it. It beggars belief that we had to wait months and spend thousands to find out basic information. It collapsed the whole chain as well.

Whilst chains can be frustrating I’d argue that it is a much better system than Australia and other countries. I don’t want to have to be finding short term rentals and living with family etc. I want to move from one secure fsmily home that I own straight to another.

How do people pay for the new house without selling the first?

That’s the basis of a chain.

Anyone who wants to avoid a chain is welcome to sell and move in with relatives or into an AirBnB , and buy a chain free property.

The seller pays for a “home buyer report” which is the equivelant of your survey and details of any covenants, utilities, service charges and so on. Also an independent valuation that the mortgage companies use to loan against. Offers via a solicitor. You can also put in “notes of interest” so the agent has to inform you of any offers or closing dates etc.

so you know what you are dealing with before viewing and don’t have surprises later on either.

Many people can't afford shirt term let's or don't want the upheave of moving twice and don't have family to move in with. I
would never contemplate selling unless I had a house to move into so in most cases there will be a chain.

Short term rentals aren't easy to find in the UK and are extremely expensive. And I do find it hard to believe that most Australians have got family (with big enough houses) that would welcome them moving in with kids, dogs etc. That arrangement generally wouldn't fly over here but maybe the Aussies are more laid back.

I wouldnt want to accept a buyers report/survey/searches completed by the seller.

I dont think the Scottish system is better at all. I dont like the idea of sealed bids I think it should be transparent.

Well you don’t have to have a chain in the UK - it’s the social norm not the law

we chose to live with family

things that can affect that - so many uk families at least are very geographically spread - I had WFH so it wasn’t a problem

many UK homes are a bit smaller than in other countries

and perhaps we are just an antisocial bunch

so say I sell my Australian house at auction, with sales packs etc on 1st January. I need to compete on 14th February.

I then start attending auctions to buy a new house. That makes me 3 weeks, say. I now have an agreement to complete on my house in 6 weeks, on 6th March.

between 14th Feb and 6th March I own no house, but I stay on my existing house under a settlement agreement.

would any British person right now suggest they think it’s a good idea that someone else lives in the house they own for 3 weeks?! Where do I live for that 3 weeks?

In Wales the system is the same as England.

We owned in Wales for six and a half years before moving back to England in 2024 and prior to buying in in Wales we stayed with family/in an Airbnb for a few weeks after completing on the sale of our previous house. We had so much stuff we needed to rent three large storage units and our two dogs were in kennels for eight weeks as our family were in a one bed flat with no outside space. It was extremely expensive all round. Never again!

Presumably do sell the old house first. Then move into rental or with family whilst they go through the process of buying another.

Having to move twice doesn’t sound like a better system to me.

You sell your house, and on the day you exchange, the money goes into the seller’s account. If they have found a new house to buy, it goes out on the same day. 99% of the time it works fine but on the rare occasions a buyer hasn’t found a new property, they will have to find somewhere to rent.

The difference is, there is a fixed period where you conclude all the missives on a house purchase. If they aren’t concluded in that period, the sale falls through. In Scots law, an offer and acceptance constitutes a final contract, if you pull out you can be sued for breach of contract. If your missives aren’t concluded but your buyer’s are, you still have to honour the contract. The standard period is six weeks, but both parties can agree to a longer term. It works because everyone involved sticks to the rules.

Moving twice sound horrendous!!! I had no idea a double move was normal in Australia, I just assumed you’d arrange to sell and buy on the same day so you just pay the removal people once to take from your old house to the new. Are removals and storage cheap in Australia?!

So you’re living out of suitcases or cramped with family for a few weeks/months rather than just trying to coordinate it all for the same day? That doesn’t seem efficient- unless you are an AirBnB host who loves getting business for out of holiday season!

It can’t work the same unless you originally found the new house and sold the old one the same day though?i
it can’t be true that the sale takes 6 weeks and the purchase takes 6 weeks unless day 1 was the same for both.

Our system might be horrendous here in the uk but I woukd be reluctant to see my property 1st and then try to buy in case I couldn’t find anywhere to buy and prices increased in the meantime.

I bought this house before my old house was sold. No chain.

A chain isn’t obligatory. It is a choice.

That sounds hugely stressful too - what if you cannot find a house to buy quick enough? It's like a chain but with punitive deadlines built in!

if you have enough or can borrow enough money to buy before you sell, yes, a fantastic choice to be able to have!

It’s a choice only if you have the money.

The likely hood of a chain falling through in Scotland is half that of England so it’s clearly got something better
my guess it’s a little more common to short term rent or live with friends or family

and because there is less to discover becuase everything is up front there is less messing around and renegotiating and waiting for surveys to come back