Still hear you saying you would never break the chain

Breaking the chain is when your sale and purchase matters do not take place at the same time, or on the same day. Whether a client has purchased ahead of completing their sale, or vice versa, will have different implications. 

The more common ‘breakage’ is when the client completes their sale ahead of completing their related purchase. 

In completing the sale, the client will have parted with their home. Whether or not they have some temporary accommodation, the costs of this, how long they can stay and whether or not they can store their possessions are all very real questions in this situation. 

We will advise clients to very carefully consider their position before agreeing to break the chain. After all, the seller on the related purchase could decide to withdraw from the transaction, leaving said client in their temporary accommodation until they can find a new property to buy, and complete a whole new transaction. All of this taking time and money.

If a client completes their purchase ahead of their sale, they will find themselves liable to pay a higher rate of Stamp Duty Land Tax (SDLT) (and for those with mortgages, paying the old mortgage and the new mortgage – porting would also be impossible). They will also need to pay the full purchase price or make up the difference if they are obtaining a mortgage. This can be very expensive, while it does not leave the client homeless, if they cannot keep up with all their payments they could eventually find themselves homeless or even bankrupt too.

Sometimes breaking the chain is just the reality of keeping a conveyancing chain together, but please make sure you do not lightly promise to break the chain. The chain will rely on you to do this, which can cause a breakdown in good will if not honoured, and please speak to your conveyancer before making such a promise. We cannot advise clients of risks if we do not know they are being considered. 

If you have any questions on this topic then please do not hesitate in contacting me, Joshua Kingston here.