Whether you are buying or selling a house, it is normal to hear all kinds of new words and phrases being thrown about. From ‘no onward chain’ to ‘house chain’, not understanding the terminology can make the already overwhelming process that much harder.
In this blog post we are going to be looking at what exactly no onward chain means, as well as what a property chain is, why they fall through, and where you may find a property that is classed as having ‘no onward chain’.
Looking for a quick answer? Check out our drop-down menu below?
- What Does It Mean If A Property Is Chain-Free?
- What Does No Onward Chain Mean?
- How Long Does It Take To Sell A House With No Chain?
- How Long Does It Take To Buy A House With No Chain?
- When Might A No Onwards Chain Sale Fall Through?
- How To Make The Most Of Having No Onward Chain
What Does It Mean If A Property Is Chain-Free?
To first understand what no onward chain means, we must first look at what the property chain is. A property chain (also referred to as a house chain) is a term used to describe the way in which house sales work. The house chain is a way of describing how house sales on the property market are all linked together, similarly to the links in a chain.
A vast majority of property sales are part of a house chain as most people cannot afford to buy their dream home without first selling their current property.
An example of how the property chain works would be a first-time buyer who is looking to purchase a small flat. The owner of the small flat is looking to buy a small house, and the owner of the small house is looking to buy a larger house, and so on. Each person depends upon the next in order to be able to move further up the property ladder.
Because of this if one person drops out of the chain, it causes the house chain to collapse and stops the other sellers involved from being able to continue in the chain.
What Does No Onward Chain Mean?
The term ‘no onward chain’ is another way of saying chain free. If a property is one that is classed as having ‘no onward chain’, it means that it is ready to be sold immediately. The buyer or seller does not need to have sold their previous property in order to progress the sale.
Why Is No Onward Chain Good?
No onward chain is seen as a positive thing as it means that you are reliant on no one else to complete the sale of your property and simplifies the entire sale process.
Why Is A Property Classed As A No Chain Property?
- Personal Reasons – One of the reasons that there may be no onward chain is due to the personal reasons of the seller. This could be because the current homeowner already has a house they want to move into to, the seller may not be in the market to buy a new home, the seller could also be emigrating, or they may be selling on the behalf of a deceased family member or friend.
- Financial Institutions – Lenders, banks, and building societies can acquire property through probate, repossession, or equity release and are re-sold on the open market. As the seller is not a private individual and is a company, there is no property chain.
- Homebuilders – Another example of a property that has no onward chain is one that is acquired in a part-exchange transaction and is now being re-sold on the open market by a company. As the property is not being sold by the private individual, there is no property chain.
- Professional Investors – If a property has been purchased by a professional investor as part of a portfolio and not for the owner to reside in then it is classed as a chain-free property. As they are purchased as investments and the vendor is selling them for business reasons and not to enable them to move on, they are not involved in the property chain.
- New Build – New build homes are another example of a type of property that is chain-free. As they are new homes, they have no previous owners and so are not reliant upon another seller selling their home before moving.
How Long Does It Take To Sell A House With No Chain?
As every house sale is different, there is no set amount of time that a no chain property sale can go on for. If you go through a genuine cash buyer, the sale can be completed in as little as 7 days. According to The Advisory, if there is no onward chain and a buyer has the cash ready to go then the sale should take no longer than 8 weeks from acceptance to completion.
How Long Does It Take To Buy A House With No Chain?
As previously mentioned, as every house sale is different, it is hard to say exactly how long a no chain property purchase would take. As long as your mortgage is approved, you could potentially buy a house with no chain in as little as 10 weeks from having your offer accepted to completion.
When Might A No Onwards Chain Sale Fall Through?
Even though being part of a house sale that has no onward chain drastically reduces the risk of your house sale falling through, it does not completely protect you against a sale falling through. Some of the most common reasons that these sales may fall through are due to:
- Financial issues can play a huge role in a house sale falling through. For example, if the buyer’s mortgage is declined.
- One or more of the preceding sales cannot proceed due to details within the memorandum of sale being revealed.
- Either the buyer or the seller delays providing information to the estate agent. This can lead to frustrations on both sides and can lead to the sale eventually breaking down.
- Issues within the home are revealed after the structural survey/home survey has been completed. This can lead to negotiation-related delays which can lead to an eventual fall through or can halt the sale altogether.
- If conveyancers are slow to progress the sale, then that can cause delays that lead to the sale falling apart.
- The sale can be ‘gazumped’ by an independent buyer.
- A buyer in the chain may have an issue gathering the funds and may break the chain.
- Either the buyer or the seller may have a change of heart and decide not to pursue the sale.
When Might A No Onwards Chain Sale Fall Through?
Even if you have a property that has no onward chain, the safest route you can take to avoid disappointment on the market is to make sure that you have funds in place to buy your next property or to sell up first.
It is however difficult to move from one occupied house to another whilst avoiding chains (no onwards and other kinds).
Because of this, it is worth considering if there is anywhere that you could temporarily stay whilst you look for a new property safe in the knowledge that you have the funds available.
This covers everything that you need to know about what no onward chain means. If you have any questions, queries, or insight into the subject, please do not hesitate to get in touch!
Alexandra is a junior content producer who enjoys writing articles and finding out more about the property market.