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‘Proceedables’ are ruling the market, says Hamptons

Research into buyers shows that the vast majority of recent transactions have not involved chains and that home movers need to be chain-free to have a chance of buying.

The Negotiator

House-buying-chain

Hamptons’ research into purchaser profiles has revealed that a record 73% of buyers were chain-free, up from 69% in 2021 and a low of 65% in 2010, as a lack of stock complicates onward purchases.

The rise has been driven by an increase in the share of homes bought by first-time buyers and investors, while movers with homes to sell have dropped off.

A record 61% of 2022 sellers chose a chain-free offer over a buyer who had a house to sell. Chain-free buyers took an average of 91 days to exchange in April, 20 days quicker than a buyer with a property to sell. The slowest markets in Great Britain – London and the North East – were the only regions where chain-free sales dropped over the last year.

Selling to a chain-free buyer has long been the preferred option for sellers looking to speed up a sale and reduce the chances of it falling through. However, the lack of stock has amplified the advantage chain-free buyers hold as chains become increasingly slow moving. Movers have found it harder to line up their next purchase given there were a third fewer homes available to buy in Q1 2022 compared to Q1 2019. This means sellers are more likely to choose a chain-free buyer than ever before.

So far this year 61% of sellers accepted an offer from a chain-free buyer over a buyer with a home to sell, up from 59% in 2021 and 58% pre-Covid in 2019.

Four in five (80%) sellers accepted an offer from a chain-free buyer where they matched an offer from somebody who had a property to sell, up from just three in five in 2016 (60%).

The current pace of the market has put buyers with a home to sell at the back of the queue.”

On average, sellers accepted an offer of 2.5% less from a chain-free buyer as a means of smoothing a sale through. So far this month it’s taken the average chain-free buyer 91 days to exchange after having an offer accepted, 20 days quicker than a buyer who had a property to sell.

This marked the biggest time to exchange gap between chain and chain-free buyers since Hamptons’ records began in 2009.

Downsizers drop

The research reveals that in particular, there’s been a notable fall in owner-occupiers, typically downsizers, needing to sell their home before a cash purchase. Cash buying owner-occupiers made up 19% of buyers so far this year, down from 22% in 2021 and 24% in 2020.

Aneisha Beveridge, Head of Research, Hamptons

Commenting 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. And 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. And 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. 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.”

April 25, 2022

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