So is it a good idea to rent in between moving home, to be chain-free?
Moving home is said to be the third most stressful thing you can do, so if you can do anything to reduce that stress – the better. When buying your next home, being chain-free can certainly reduce your stress and offers many advantages over other buyers (and some disadvantages).
So, what is a chain? A property chain is made when there is a line of home buyers and home sellers linked through their property transactions e.g. a first-time buyer purchases a property, the sellers of that property then buy another property, and those sellers then buy another property, so on and so forth. Each home sale and purchase are reliant upon the success of every property in the so called ‘chain’. This means if there is one hiccup on one of the properties, every sale and purchase along the whole chain would collapse. No wonder everyone is on tenterhooks when there is a long chain involved.
Yet buyers who sell their home before searching for a new home considerably reduce their stress levels because they are not needing all the ducks to ‘line up in a row’ on the sale of their home in order to buy their new home.
Being chain-free puts home buyers in an enhanced position to negotiate with home sellers and they in turn may be more enthusiastic to accepting a lower offer.
Sounds advantageous, doesn’t it? Everyone is a chain-free buyer once, when they are a first-time buyer and if they are lucky enough to have an additional home to move into. The other option is selling your home and moving into rented accommodation, but that will end up costing quite a few thousand pounds (in what many perceive as wasted money) together with the added cost of employing the services of home removers twice (with all the hassle that entails doubled!). However, that is what many homeowners are doing.
Over a third of all the properties on the market today are being sold without a chain.
We can’t disagree, moving home twice in a short period will be stressful and rent could be perceived as ‘wasted money’, but we recommend you could look at a ‘bigger picture’. It is one of the sturdiest sellers’ markets in a generation, meaning you should get top dollar for your home, knowing that many buyers are keen to complete before the stamp duty holiday ends in the autumn.
By waiting for the return of stamp duty and for the full roll out on the immunisation programme to give more homeowners the peace of mind to place their home on to the property market, for house prices to cool, and the number of properties for sale to increase, you could pounce in and buy at a later date, with more homes to choose from and at more realistic asking prices.
Of course, these aren’t all homeowners going into rented accommodation hoping to bag a bargain next year. Many of the bungalows are being sold because their homeowner has either moved into sheltered accommodation or sadly passed on and there are landlords selling their buy-to-let rental investments.
And, there are also risks involved with this type of home buying strategy. Moving into rented accommodation means you are out of the property market. Property values could dip in the next 12 months, yet they still could continue to rise – you are taking a gamble on a dip in the market.
Like most things in life, it depends on your own personal circumstances, where you are in your life, your attitude to risk and your belief on what will (or won’t) happen to property values in in the next 12 to 18 months.