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Bank of England CHAPS issue "will affect property exchanges and completions up and down the country today"

ended 18. July 2024

The Bank of England has just announced that: “A global payments issue is affecting the Bank's CHAPS service and delaying some high value and time-sensitive payments, including some house purchases. We are mindful of the impact this is likely to have and are working closely with a third party supplier, industry and other authorities to resolve the issue as promptly as possible. If you are concerned about a CHAPS payment you plan to make or receive today, please contact your bank, or other payment service provider. Retail payment systems are unaffected so people and businesses can continue to use cash points, card payments and bank transfers as normal.” Newspage asked brokers, conveyancers and property experts for their thoughts, below.

12 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This is possibly the single worst banking issue that could happen for house purchases. Solicitors generally request funds the day before completion, ensuring they have the funds on account ready to complete. If this doesn’t get rectified by tomorrow morning, there will be thousands of buyers left in breach of their contracts, and also potentially homeless.
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Chris Barry
Director at Thomas Legal
This issue will affect property exchanges and completions up and down the country today. Whilst many completions are preset and happen earlier in the day, some will still happen between the issue being announced and the cut off of 4pm. For many, this has just made an already stressful day even more stressful. Most contracts have a 12 or 1pm hard time embedded so if the payment is being made now they are technically in breach of contract.
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Harps Garcha
Director at Brooklyns Financial
This is not the best situation for anyone hoping to complete or exchange on their home purchases today and potentially tomorrow. Homebuyers and movers will be stuck waiting for the green light to collect their keys, with removal vans parked in driveways. The big question is, what’s going to happen? How will removal companies fit all the moves into their jam-packed schedules? Delays in funds reaching solicitors could throw a wrench in exchanges, adding even more uncertainty to the mix.
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Andrew Montlake
Managing Director at Coreco
This has the potential to be a nightmare scenario for home buyers on the day of completion, potentially leaving them and their removal vans all packed up with nowhere to go. The home buying process relies on this system so for any buyers looking to complete, it is worth a call to their conveyancers to make sure all is in order.
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Hannah Bashford
Director at Model Financial Solutions
This could be very detrimental for anyone looking to complete on a house purchase today. They may be left high and dry with nowhere to move to if funds aren’t passed through the system in time to complete.
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Simon Bridgland
Director at Charwin Private Clients
This will undoubtedly impact those imminently expecting to move home. I can see many anxious calls to solicitors and removal firms happening over the next few hours and potentially next few days. Best to keep calm as there is nothing borrowers can do about it. Conveyancing firms would have usually already arranged for funds to be sent across to them in advance, so short-term CHAPS issues, in the main, should not delay completions. But tell that to the poor sole at the top of a chain waiting on their cash.
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Justin Moy
Managing Director at EHF Mortgages
This is a huge issue for those looking to buy or sell property today, as the CHAPS service is relied upon so much by solicitors. Often lenders will send their money the day before, just as a bit of reassurance, but when money is passed through the chain of buyers and sellers, we could see many unable to offload vans and not able to take posession of their new home.
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Ben Perks
Managing Director at Orchard Financial Advisers
As if it wasn't hard enought to get property purchases over the line recently, now we have a nationwide banking issue to contend with.
If you are concerned about whether this will affect you, engage with solicitors early to see if their bank or the lender's banks have been impacted. Better to know before you box the entire house up.
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Dariusz Karpowicz
Director at Albion Financial Advice
This is serious news from the Bank of England. The global payments issue affecting the CHAPS service will delay high-value and time-sensitive payments, including house purchases, and put many deals and completions in a difficult situation. Let's hope for a swift resolution to minimize disruptions.
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Craig Fish
Director at Lodestone Mortgages
This is a disastrous situation and has the ability to change what should be a dream day into a nightmare. For anyone that may be affected, get in touch with your conveyancer, lender or broker urgently.
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Jack Tutton
Director at SJ Mortgages
The CHAPS system being down will cause chaos in the housing market. Typically, lenders send funds to solicitors the day before completion. Friday is the busiest day for transactions to go through so this couldn’t have happened on a worse day. If someone has exchanged and is expecting to complete tomorrow and the funds haven’t arrived, technically you would be in breach of your contract, which could have dire consequences.
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Dr Konrad Rotthege
Co-founder at Conveyo
CHAPS is crucial for high-value, same-day transactions, making it the preferred method for property completions. A system failure brings all property transactions to an abrupt stop. Delays in one transaction can cause a chain reaction of delays in others, disrupting the entire chain, leading to significant inconvenience for all parties involved, including significant financial loss.