CHAPS Crash Could Delay Deals

The Bank of England’s problems with the CHAPS system of electronic money payments, including those transferring monies at the end of the house-buying process, will almost certainly lead to problems in house completions during this week.

On Sunday an additional payee was added to CHAPS, the Clearing House Automated Payment System. This triggered a problem when the system was started yesterday morning, meaning some previously-automated payments had to be handled manually.

The Bank said its payment system of which CHAPS is a part, known officially as Real-Time Gross Settlement, was suspended for most of Monday, being restarted around 4pm.

“Whilst Monday is not the busiest day in terms of completions, the failure of the payments system forhouse purchases will have a cascading effect and it is likely any payments will now be held up for a day or more as money takes time to transfer” warns Mark Hayward, managing director of the National Association of Estate Agents.

“The one part of a sale which is fixed is the completion date – with payments not being able to be processed today, this will not only have an effect in terms of the completion date moving, but also accompanying arrangements which may have been scheduled, such as moving support or van hire and the transfer of utilities to the new address” he says.

The full effect of the problem is unlikely to be known until at least Thursday.

The CHAPS system moves billions of pounds every day between financial institutions with an average daily total of 138,000 payments with a combined value of £277 billion.