18 July 2024 , 20:40
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Bank of England said issue affected some payments on Thursday but that service had been restored by 4.30pm
House purchases were delayed on Thursday because of problems with a crucial payments system, the Bank of England has said.
There were claims that the issue could have affected a number of homebuyers and movers, with some “stuck waiting for the green light” and loaded-up removal vans parked in driveways, though at 4.30pm on Thursday the Bank said service had been restored.
Earlier in the afternoon, the Bank said a “global payments issue” was affecting its automated Chaps payments system for high-value and time-critical transactions, which processes about £350bn a day.
It added that the issue – which the Bank did not elaborate on – was delaying some payments, “including some house purchases”.
The Chaps system is used by solicitors and conveyancing firms to complete housing and other property transactions. Meanwhile, individuals will often use it to buy high-value items such as a car or to pay a deposit for a house, while banks and other financial firms use it to pay one another large sums.
The Bank later 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.” It added: “We expect that all payments received by the Bank today [Thursday] will be settled by the end of the day.”
It was not clear how many house purchases had been delayed, or what impact this may have had on those affected.
Before the announcement that service had been restored, Anthony Codling, housing analyst at RBC Capital Markets, said: “The Chaps collapse could leave hundreds of homebuyers out in the cold.”
He added that on average there were about 4,000 housing transactions a day.
This is not the first time technical issues have caused the Chaps system to fall down: it was hit by problems in August 2023, and there was an almost 10-hour outage in October 2014 which prompted an apology from former Bank governor Mark Carney and an official investigation.
Jack Tutton, director at broker SJ Mortgages, said: “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.”
Hannah Bashford, director at Model Financial Solutions, said people looking to complete on a house purchase today “may be left high and dry with nowhere to move to if funds aren’t passed through the system in time to complete”.
Retail payment systems such as card payments, bank transfers and cashpoints were unaffected by the problems.