Have you ever noticed the words "chain free" when searching for a new home? If you have, it means you were looking at a property that didn't require an onward purchase to complete, which reduces the chances of the chain breaking down.
And if you're not relying on anyone buying your home either, you can enjoy the house-buying experience completely chain free. Good times! As you may have guessed by now, buying chain free has plenty of upsides. So we thought it would be a great idea to list the benefits for you.
Read on, and discover the pros of buying chain free.
We've already covered property chains in more depth, but in a nutshell, a property chain is when a link of buyers and sellers are connected through their transactions. Each property purchase relies on the success of the next one, and if one falls through, the whole chain can break.
Property purchases that don't require a chain tend to complete faster than ones that do. You're only relying on your purchase to go though, which means there's no risk of the chain breaking or the process being delayed because someone else in your link has issues with their sale.
Purchasing without a chain is much more straightforward and stress-free. As a chain-free buyer, you don't need to concern yourself with other property sales, nor are you relying on anyone else for your purchase to go through. It makes the entire process a more simpler affair.
Buyers who don't require a chain to purchase their home are more appealing to the seller. They know that your purchase doesn't rely on any other links, which means that you're more likely to complete without having the worry of the chain breaking. For a seller this offers more of a guarantee that the sale will go through.
Once you've worked out what kind of mortgage comfortably suits your financial situation, it's important to consider the additional fees associated with paying your lender and solicitor for getting the mortgage, any necessary taxes or fees that pop up during move-in. Unfortunately, lenders often give these fees different names, which can drastically affect the total cost of a mortgage deal and make them difficult to compare.
Your lender will require an arrangement fee, usually between £1,000-2,000, to pay for them setting up your mortgage. You have the option of paying the arrangement fee upfront, or adding it to the mortgage. Depending on the size of your mortgage, it may be wiser to choose the latter despite it incurring interest as part of the loan. Calculate both options to see what makes the most sense for you.
Lenders may also charge a separate booking or reservation fee, typically £100-200, to secure a deal for you. Some lenders combine this with your arrangement fee.
A valuation fee covers the cost of an inspection of your property, which assures the lender they can get a good price if they need to repossess your home. This fee costs an average of £250 but ultimately depends on the property's value. It is for your lender's benefit and shouldn't be confused with a survey fee, which is a thorough structural check-up of the property for your peace of mind. A survey fee averages £400-700, depending on the type of survey.
Your solicitor is likely to charge you £500-1000 for all the legal work and conveyancing associated with getting your mortgage. There are also additional fees associated with moving into your new home, such as removal costs, upkeep, or furniture.
Finally, you are required to pay a Stamp Duty Land Tax if you purchased the property over a certain price point. As of 8 July 2020, you will not have to pay stamp duty on homes up to £500,000 or more and this will remain in effect until 31 March 2021. For more information about the Stamp Duty Land Tax, check out our guide here.
It's normal to feel cautious when making a decision as big as buying your first home. Thankfully, there are many resources out there to help! Do your research, ask around and talk to one of Emoov's mortgage advisors, who offer completely free advice so that you can make an informed decision.
One of the more popular property trends at the moment sees buyers selling their home and renting in the short term. This gives them a little bit more freedom, as there's no pressure to find a home before the sale completes.
Renting also means that buyers can look for a new home away from property chains. Not having a home to sell when buying can be advantageous when negotiating a house purchase. This is because you can move faster and negotiate over the price, potentially getting a significant discount.
While renting is an option for chain-free buying, it can prove complicated and costly. You will need to pay monthly rent, which could last for anywhere between a few months and a year. Another chain-free buying option includes using a service that buys your house from you directly.
That means you can look for your new place free from any property chains and safe in the knowledge that you have a buyer for your home.
Emoov is a trading name of Griffin Residential Limited. Griffin Residential Limited is a company registered in England and Wales. Company Reg No. 09362284.