We take a look at the impact on property chains of the coronavirus restrictions - and what you can do to keep your chain intact ready for your move.
Buying a property can be stressful at the best of times and keeping a property chain moving can be challenging.
But the impact of the coronavirus pandemic has added a whole new layer of complexity to the process.
Not only are you likely to have to put your own move on hold, but you also face the heightened worry of someone in your chain pulling out of their purchase.
We take a look at the steps you should take if you're part of a property chain during the coronavirus lockdown.
What is a property chain?
The term property chain is used to describe the links between people buying and selling homes.
A chain begins with someone who is only a buyer and ends with someone who is only a seller, but everyone else in between is both buying a property and selling one, meaning they are dependent on another transaction.
Property chains can be quite large and coordinating completing the conveyancing process and setting moving dates between all the different buyers and sellers can be complex at the best of times.
Can I still move home if I am part of a chain?
If the property you are moving into is empty and you can move yourselves, you can continue with your transaction.
But if it is currently occupied, the government has asked that everyone involved in the transaction delays exchanging contracts while the current social distancing measures are in place.
In theory, this means that if everyone involved in your chain is moving into an empty property, you can still go ahead with the transactions.
In practice, however, this is highly unlikely, as by their very nature, chains tend to involve people who are living in the property they plan to sell in order to buy their new home.
There is an exemption for ‘critical’ house moves where people have been unable to agree a new moving date.
But if someone in your chain shows symptoms of coronavirus or is self-isolating, the move still needs to be put on hold.
As a result, unless you are in a very short and simple chain, it is highly likely that your move will have to be delayed.
What should I do to help the process?
While remote working estate agents and solicitors will be doing everything they can to keep chains moving, there are still steps you can take yourself to make the process as smooth as possible.
The first thing you can do is make sure you respond to any requests, such as providing information or signing documents, from your own or your purchaser’s solicitor as quickly as possible.
In normal circumstances, you would consider delivering any documents by hand or by courier to ensure they get there quickly. In these times, emails are being used more frequently.
Getting all of your financial information in order can also help your mortgage application process go smoothly, minimising any delays in this area.
You may also have to step in to keep things on track by chasing up other parties in the chain.
Employing an experienced solicitor to do your conveyancing and keeping in regular contact with them to find out if there is anything you should be doing can also speed things up.
How long will it take?
In normal circumstances, the process of buying and selling a home typically takes eight to 12 weeks, although it can take longer if there is an issue for someone in the chain.
Under the current situation it is likely to take longer. Not only have people been advised to delay exchanging contracts until after the lockdown measures are eased, but surveyors are not able to carry out any non-urgent surveys in properties that are occupied, and they cannot do any work in homes where someone has symptoms of coronavirus.
As a result, anyone in the process of buying or selling a property should plan for delays in the process.
What happens if my mortgage offer is due to expire?
When lenders agree your mortgage, the offer is typically only valid for three months.
If you do not start the loan within this period, you usually have to go through the mortgage application process again, paying all the associated fees.
You may also not be able to apply for the same rate if your lender’s product range has changed.
The good news is that in the current situation, lenders have agreed to extend mortgage offers beyond the usual three-month period.
While this is one less thing to worry about, you should still contact your lender to inform them about your situation and agree an extension to the mortgage offer.
What if someone in the chain pulls out?
The government has stressed that there is no need for people to pull out of transactions due to coronavirus, but rather it has asked people to be patient and wait until the lockdown measures are lifted before they exchange contracts.
Unfortunately, even in normal market conditions, chains are liable to break down.
There are a number of different reasons why chains collapse, ranging from buyers and sellers changing their minds, to people being made redundant or not being able to get a mortgage, to surveys uncovering structural faults or costly repairs that are needed on a property.
Some of these issues can be avoided by asking estate agents to check potential buyers are serious and have the means to go ahead with buying your home, but it is not possible to rule out all of these potential issues.
If your chain does collapse, there is not much you can do apart from sit tight and be patient until another buyer or seller is found for the missing link.
In the current market, it may take longer than usual. The best thing you can do is encourage everyone in the chain to keep communicating with each other, so that you all know what stage you are at.
What if I want to pull out of buying?
If you decide you want to pull out of your purchase and you have not yet exchanged contracts with your seller, you won’t face any penalties.
But once you have exchanged contracts, you are legally obliged to go ahead with the transaction.
If you do withdraw your offer you will lose any deposit you have paid, usually at least 10% of the property’s value, and the seller could potentially take legal action against you for additional compensation.
The above does not apply to Scotland, which has a different system for property purchases.
Is there any way I can avoid being in a chain?
If you don’t like the idea of being in a property chain, there are a number of steps you can take to either avoid one or at least reduce its size and complexity.
One of the easiest ways to avoid a chain is to purchase a new-build flat or house, meaning you are purchasing your home directly from a housing developer.
Other options would be to look for a property with an owner who is not looking to purchase a new home, such as an investment property or holiday home, or a property where the previous owner has died.
If you have a property to sell, you could consider selling it before you look for a home to buy, and either live with friends or family or rent somewhere for the time it takes you to find and buy your next home.
Alternatively, if you receive multiple offers from different buyers for your home, you could accept one from someone who is either a first-time buyer or a cash buyer, and therefore not part of a chain themselves.
You may also be interested in…
- Coronavirus: how you can view potential homes virtually
- Coronavirus: the impact on house prices
- Coronavirus: how you can still buy and sell your home
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