Are you in a chain and are you confident you will all complete?

PK_London

My neighbour in Greater London tried to sell his flat a few months ago in summer and locked down a low mortgage rate. He accepted an offer from a buyer and had an offer accepted on a new purchase himself therefore entering a chain.

A few weeks later in September his flat got down valued considerably by the valuer and after weeks of wasted negation time the buyer pulled out and walked away. My neighbour scrambled to find a new buyer quickly but in the end ended up losing out on his purchase so the chain is broken. Now he's dropped the price by 10% and changed estate agent but still no luck.

In the mean time three similar flats have gone on the market in the same development, mainly from buy to let owners looking to liquidate and they have priced their properties much cheaper for a quick sale. Some of these flats are bigger and cheaper and still very sluggish to sell.

I also have a few estate agent friends who are saying there is carnage in the market given the high mortgage rates and more difficult lending criteria so chains are breaking.

I just wanted to hear whether about whether any of you are in chains and details of the ups and downs you are experiencing with a view to help others in the same situation.

Good luck to any of you who are.

Maka344

Following. Thanks. 

K_S

@pk_london I'm only a small independent firm so my experience isn't necessarily representative.

But personally I haven't yet seen any spike in client chains collapsing or a jump in down-valuations. In fact, I had more down-vals early in Q1 2021 than in recent months. Even on broker forums, I haven't heard of anything of the sort that could be described as 'carnage'. EAs have reported fewer viewings and brokers have been talking about being quieter on the new business enquiries side but again nothing spectacular.

ACG

Ive had 3 completions today.
An estate agent I know has had 4 completions (unrelated to mine) today. 

I have one customer who looks like he may pull out of his purchase, but thats because the vendor is being awkward about supplying various documents. 

So far I have not had anyone pull out since the mini budget. I have noticed a drop in enquiries, although unexpectedly last week there was a bump in enquiries. It normally does start to die down early-mid november so I expect next week/the following week to start to die down, but that is expected. 

In short, the people in chains probably want to complete because they have likely secured lower rates than available now in the main. The people on higher rates have applied knowing they will be getting higher rates so I would not expect any greater numbers of purchases falling through than before, if anything I would expect less. 

PK_London

ACG said:

Ive had 3 completions today.
An estate agent I know has had 4 completions (unrelated to mine) today. 

I have one customer who looks like he may pull out of his purchase, but thats because the vendor is being awkward about supplying various documents. 

So far I have not had anyone pull out since the mini budget. I have noticed a drop in enquiries, although unexpectedly last week there was a bump in enquiries. It normally does start to die down early-mid november so I expect next week/the following week to start to die down, but that is expected. 

In short, the people in chains probably want to complete because they have likely secured lower rates than available now in the main. The people on higher rates have applied knowing they will be getting higher rates so I would not expect any greater numbers of purchases falling through than before, if anything I would expect less. 

Congrats on the completions! I have many friends in the industry and I can only go by what they say - although as my username suggests I am London centric!

There there is a mad dash to complete if you have a low rate locked. I completed on my own purchase just last month @ 2.29% which was valid until December but my first time buyer's low rate would have expired at the end of September and I had a chain free vendor (after two failed accepted offers) so it worked out ok for us all with just days to spare in the end. It could have been a lot worse but with ESW1, cladding, ground rent doubling and many deed of variations later I was able to complete in time.

I hear of many others in extraordinarily long chains - approaching double digits. Its a stressful time to be buying or mortgaging but I do wish the best of luck to everyone 

ACG

Sales will fall through, there may be people who have stretched themselves or didnt but the cost of living is giving them doubts. 
There will always be reasons for people to pull out, but at the moment all of my applicants seem pretty solid, obviously I have no idea about the rest of the chains but so far so good. 

simon_or

I own a couple of BTL properties in east London and do keep a close eye on Rightmove using browser plugins that give a good view of how the market is working. There have been reductions and flats seem to be sticking around longer but no signs of hysteria that I can spot. Good quality houses still seem to be flying off the shelves much as they've been doing over the past couple of years.

Even in normal times, a full third of property transactions in England fall through after offer for various reasons, chains break, so the needle would have to move a lot to qualify as a huge difference.