The Bank of England has resolved a global payments issue that adversely affected its CHAPS service and caused possible delays to “high-value and time-sensitive payments” such as residential property purchases.
The central bank announced yesterday that there was an issue on its website that could potentially have an impact on property transactions.
The brief CHAPS collapse had the potential to hundreds of homebuyers out in the cold. But the Bank of England was able to resolve the issue rather promptly after working with a third-party supplier.
“If conveyancers don’t get the money, they can’t release the keys, and the completion delays don’t just impact the buyer but also all those in the chain,” said Anthony Codling, head of European housing and building materials for investment bank RBC Capital Markets.
In an update released at 4.30pm yesterday, the Bank of England said: “We are pleased to confirm that the third-party supplier has restored service following their earlier issues, and CHAPS payments are settling as normal.
“We expect that all payments received by the bank today will be settled by the end of the day.”
Retail payment systems were unaffected, the Bank of England said, meaning people were able to continue to use cashpoints, card payments and bank transfers as normal.
Toby Leek, NAEA Propertymark president, commented: “Completing on a property can be extremely stressful even without technical issues, however it is important to remember that should systems ever cause unexpected problems at a vital moment within the transactional process these issues do tend to be fixed quickly. The flipside is in the short term, this can have the potential to leave people waiting outside their new property with a removal van full of their belongings in very extreme cases.”
The fact that some home buyers faced potentially having a glitch’ hold their transactions up is yet another proof point that the technology and infrastructure supporting the market is no longer fit for purpose, according to Joe Pepper, UK CEO of PEXA.
He said: “It [the technology] is creaking at the seams. Buying a home is a stressful and laborious enough experience as it is for consumers without it being compounded by payments falling through or getting held up.
“Digitisation cannot come soon enough. With new regulation putting consumer outcomes front and centre, it is imperative that we see the adoption of new, reliable technology that improves the experience for home movers and remortgagers, speeding up transaction processes from days to minutes.
“Working with the Bank of England, we have built an entirely new payment system for the housing market – an alternative to CHAPS – and we are working to embed this with the industry. We believe having a scalable system that can reliably handle peaks in demand will future proof the housing market, preventing this type of issue from recurring.”
