Broken Chain
One of the inevitable side effects of the UK property market pausing will be the breaking of many housing chains. Some homeowners and buyers have already decided they no longer want to move in the current circumstances. This is causing headaches for others in their chain, as it now means the process has to start again for the rest.
I had a conversation with a bridging loan specialist last week who informed me a client of his received confirmation from their bank that they had decided to withdraw the mortgage offer – THEY HAD ALREADY EXCHANGED CONTRACTS!
The client was in the process of getting a bridging loan to save the sale while looking into legal action to sue the bank.
In many cases, chains may break from the bottom as first-time buyers pull out – the stock market crash has dented many Help-to-Buy ISAs and Lifetime ISAs. Banks lending criteria has also tightened up in the face of the crisis.
Opposing that, interest rates are now at an all-time low! So once the lockdown is over it could be that first-time buyers will be there waiting to fill the gaps and repair some broken housing chains.
My personal advice to people in a situation like this is to review everything like a business transaction and remove your emotional connection to your property. If this means losing a little bit of money to complete on the desired move then it potentially will be a decision in a few years you are happy you made.