Do you know how to break the housing chain?

For many of us, once we've made the decision to buy a new house, we want to start the moving process as soon as possible. However, many people can find themselves "stuck" in a housing chain.

A housing chain is a sequence of linked house purchases, with each being dependent on the others before anyone can proceed with their propety sale.  

The longer the chain, the greater the chance of something going wrong. A ‘break’ anywhere in the chain means no-one can move.

Being in a chain is not only stressful but it can also be expensive. Non-refundable mortgage fees, survey costs and solicitors’ fees may all be lost if someone else in the chain pulls out.

You might even lose your dream home if you are not able to buy when you planned to do so and the seller finds another buyer. Then you really are back at the start of the house-buying process all over again.

Read below for some helpful ways of breaking the chain.

Selling your property before you buy

If you want to buy a new home and be completely ‘chain free’ you could consider selling your home first. If you have time on your side and don’t feel the pressure to sell quickly, you might be in a better place to accept the offer you want rather than feel you ‘have to go for it’.

Use a bridging loan

Bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short-term access to money. However, they are usually provided at a high rate of interest.

Extending the mortgage on your existing home

If you don’t want to be stuck in a housing chain, you might consider extending the mortgage on your existing property and using that money as a deposit on your new home.

Part exchange

Part exchange  is when one item is traded against another. It is most commonly used when people want to buy a better car or property.

The existing item is used in value against the new item you want to purchase and is taken as ‘part payment’.

If you want to buy a new house, you can part exchange your existing property.

Make sure you carry out plenty of research and seek the advice of professionals before you make a decision because breaking a housing chain can come with some risks,