When one sale in a property chain falls through, everyone else can be at risk of losing their purchase. A chain break bridging loan can provide the short-term funding needed to keep the transaction moving.
Property chains are fragile. If one buyer withdraws, loses their mortgage offer or simply takes too long, transactions further down the chain can be put at risk — even when your own sale and purchase are otherwise ready to complete.
A bridging loan can provide a temporary solution, allowing you to complete your purchase without waiting for your existing property to sell.
At a glance
- A chain break occurs when a delayed or failed sale puts your onward property purchase at risk.
- A bridging loan provides the short-term funding to complete your purchase without waiting for your sale proceeds.
- The exit is usually the eventual sale of your existing property, with the proceeds used to repay the bridge.
How does a property chain break?
Suppose you've agreed to sell your current property and buy a new one, with both transactions due to complete on the same day.
If your buyer pulls out, their mortgage is delayed, or another transaction further up the chain falls through, your sale may no longer complete on schedule. Without the proceeds from your sale, you may not have the funds needed to complete your onward purchase.
This is where a chain break bridge can help.
How a bridging loan solves a chain break
A chain break bridging loan provides the short-term funding needed to complete your purchase before your existing property has sold. Depending on the circumstances, the loan can be secured against the property you're buying, the property you're selling, or both.
Once your existing property sale completes, the proceeds are used to repay the bridging loan, allowing you to move forward with your purchase without waiting for the chain to resolve.
- Complete your purchase without waiting for your existing sale to go through.
- Use one or both properties as security, depending on the lender and your circumstances.
- Move quickly, with specialist lenders often able to work to tight completion deadlines.
- Repay the bridge from your sale proceeds once your existing property completes.
Example: using a bridge to break a chain
You are selling your current home for £400,000 and buying a new property for £550,000. Your buyer suddenly pulls out shortly before completion, but the seller of your new property is unwilling to wait.
A bridging loan could provide the funds needed to complete the £550,000 purchase. Once your original property is sold, the sale proceeds can be used to repay the bridge.
The exact amount available will depend on factors such as the property values, existing mortgages, loan-to-value and lender criteria.
What you'll need to have ready
Chain break cases can be time-critical, so having the key information ready can help your application move quickly. You may need:
- Details of the property you're buying and selling, including the agreed purchase and sale prices.
- Your solicitor's details and confirmation of where both transactions have reached.
- Details of any existing mortgage or charge on the property you're selling.
- Evidence of your exit, such as an agreed sale, buyer details and expected completion date.
The clearer the transaction and your exit strategy, the easier it is for a lender to assess the case and work towards a tight completion deadline.
Frequently asked questions
How quickly can a chain break bridging loan be arranged?
Chain break situations are time-critical, and lenders experienced in this area can often move within days rather than weeks, particularly where the security property and exit strategy are already clear.
What's my exit strategy if I use a chain break bridge?
Your exit is almost always the completion of your original sale, whether to the same buyer once their situation resolves or to a new buyer if you need to remarket the property.
Can I use a chain break bridging loan on a commercial property chain?
Yes, the same principle applies to commercial transactions caught in a linked chain of sales and purchases, not just residential moves.
