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First Time Buyer

‘Preferred’ chain-free buyers can still negotiate property discounts

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
25/04/2022

The number of homes sold to chain-free buyers in 2022 has reached a record high of 73%, while sellers are more likely to accept lower or matched offers from this cohort.

Home sellers prefer to transact with chain-free buyers as movers can have a difficult time arranging their next purchases due to the lack of housing stock.

According to data from Hamptons, there were a third fewer available homes in Q1 2022 compared to the same period in 2019.

As such, it’s seen an uptick of homes sold to chain-free buyers, from 69% of sales last year, and an increase from the lowest level (65%) in 2010. 

The estate agency said 61% of sellers have accepted an offer from a buyer with no home to sell so far this year. This is a rise on the 59% of chain-free buyers accepted by sellers in 2021, and 58% over the same period in 2019. 

Some 80% of sellers accepted chain-free buyers where their offer was matched by a buyer with a home to sell, compared to a proportion of 60% in 2016. 

On average, sellers accepted offers which were 2.5% lower because the buyer was chain-free. Hamptons suggested this was likely due to the smoother sales process after its data showed the average chain-free buyer took 91 days to exchange after having an offer accepted. This was 20 days quicker than a buyer with a property to sell. 

The firm said this was the biggest gap between chain-free buyers and buyers with a property to sell since its records began in 2009. 

First-time buyers driving trends 

The uptick in chain-free buyers has been steered by first-timers who have so far purchased a record proportion (26%) of homes in 2022. This was up from a previous high of 24% last year. 

Investors have made up 14% of buyers, an increase from 12% in 2021, while second home buyers stayed flat at 2%. 

Some buyers who have a home to sell have opted to move into temporary rented accommodation to break the chain, resulting in a drop in sales to owner-occupiers with a property to sell. 

The share of homes purchased by someone selling their main residence and buying another home fell from 30% in 2021 to 27% in 2022, which is an all-time low. 

There has also been a notable decline in the number of owner-occupiers needing to sell their home before buying a property with cash.  

This type of buyer has accounted for 19% per cent of purchasers so far this year, compared with 22% last year and 24% in 2020. 

Regional differences 

The regions with the slowest markets were also the ones with fewer chain-free sales, Hamptons’ data showed. 

London recorded a nominal drop from 79% of chain-free buyers in 2021 to 78% so far this year. In the North East, 71% of purchases were chain-free compared to 72% last year. 

Conversely, increases in chain-free sales were recorded in faster moving markets. Hamptons said this was because sellers may be discouraged from choosing someone with a home to sell when they have the option of chain-free buyers. 

The West Midlands recorded the highest proportion of chain-free buyers at 80% so far this year, up from 78% last year. 

Aneisha Beveridge, head of research at Hamptons, said: “The current pace of the market has put buyers with a home to sell at the back of the queue. In a fast-paced market such as today, over three-quarters of sellers had multiple offers on the table to choose from. Given chain-free buyers tend to complete quicker and sales are less likely to fall through, they are fast becoming the preferred option for sellers.  

“However, chains serve an important role in the market, helping people move up and down the housing ladder. It’s second and third steppers alongside downsizers who rely on the capital raised from the sale of their home for their next purchase who are finding it particularly tough.” 

She added: “This is also exacerbating the lack of stock given their homes are increasingly being bought by first-time buyers and investors who do not have a property to sell. Roughly speaking, for every 10 homes sold so far in 2022 only three of those buyers will bring a home onto the market to sell, creating a chain.”