House purchase payments delay fixed, says Bank of England

The Bank of England has said a “global payments issue” which may have delayed some high value and time sensitive payments, including house purchases, has been fixed.

The Bank said any payments made during Thursday via the CHAPS system, which is used by traditional High Street banks as well as international lenders, would be settled by the end of the day.

It has advised anyone who is worried about a CHAPS payment to contact their bank.

The problem was not affecting ordinary debit and credit payments, cash machines or bank transfers.

“We are pleased to confirm that the third party supplier has restored service following their earlier issues, and CHAPS payments are settling as normal,” the Bank said.

“We expect that all payments received by the Bank today will be settled by the end of the day.”

Overall, there are 200,000 payments via CHAPs every day in the UK, at a value of £363bn.

The problem has originated with part of a wider global network known as Swift. It is understood that the glitch is not considered to be a cyber incident.

Banks and lenders use the CHAPS system to transfer money between them.

Several thousand financial institutions in the UK could have been affected, either directly or indirectly.

However, individuals use it for high-value transfers such as house completions and the purchase of cars. On average there are around 4,000 housing transactions a day.

“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,” said Andrew Montlake, from mortgage broker Coreco.

“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.”

Solicitors can agree to complete property transactions with an understanding that the funds will be transferred later, but chains could be affected.

The issue originated with part of the Swift system – the global financial artery that allows the smooth and rapid transfer of money across borders. It stands for Society for Worldwide Interbank Financial Telecommunication.

Created in 1973 and based in Belgium, Swift links 11,000 banks and institutions in more than 200 countries.

Not a bank in itself, it is a co-operative running an instant messaging system that informs users when payments have been sent and arrived.

It sends more than 40 million messages a day, as trillions of dollars change hands between companies and governments.