If you're buying or selling a house today there’s bad news from the Bank of England. Its mortgage payment system collapsed this morning, leaving potentially thousands of homemovers stranded.
Part of the automated system – known as CHAPS – has been down since 6am and the Bank was unable to say when it would be back up and running.
However by early evening the Bank of England said it had begun processing payments through RTGS as normal. It said it had extended opening hours until 8pm to try and catch up with the all transfers expected to be settled on Monday.
Mark Carney, the Bank’s Governmor, launched an independent review into how part of the automated system Chaps had failed.
The technical problems were caused by “routine maintenance” at the weekend but mean thousands of payments between banks are not being settled automatically, with the only the biggest amounts being processed manually while the system is repaired.
The Bank's Real-Time Gross Settlement system - which is used by payments company CHAPS to transfer mortgage funds - was hit this morning by the system upgrade at the weekend. It normally operates between 0600 and 1600 on weekdays but has been paused since the problem was identified and the system is being reset.
"We are working to address this issue as quickly as possible, and restart the... system in a controlled manner," said a spokeswoman for the Bank of England.
"The most important payments are being made manually and we can reassure the public that all payments made today will be processed."
The shutdown left home-buyers moving today facing delays getting hold of the keys. One mover, Joe Friedlein, tweeted: “This has to be top of my ‘what I don’t want to happen on the day that we are moving house’ list.”
Mr Friedlein, moving home in Colchester today, told us: “I don’t know what happens. We’ve got four houses in the chain and none of those (sales) can occur because the money can’t be handed around. I rang my solicitor this morning and he said that they hadn’t received any funds and that nothing had come through from my mortgage provider.”
Stuart Iles, 46, was hoping to move today with his wife, from Tamworth, Staffordshire, to their new home in Burntwood. "Our removal firm was here at 8am and we were packed up and ready by noon," he told the BBC. "But we have been sat on the floor in an empty house for hours."
He said he was worried because the removal firm would eventually decide to put the items in storage and the couple would have to find somewhere to stay overnight. There were three buyers in the chain who were all affected, he said.
Mark Hayward, managing director of the National Association of Estate Agents said: “While Monday is not the busiest day in terms of completions, the failure of the payments system for UK house 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, which also means a delay for those hoping to move. This week is half term for many, so it will be a time when a lot of people are trying to move house – no doubt it will be a frustration for those that are now delayed.
“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.”
The CHAPS system moves billions of pounds every day between Britain's main banks and building societies. The latest figures show that in 2013 it was used to process payments with an average daily total of 138,000 payments with a combined value of £277bn.
A CHAPS spokesman said it would extend its operational day to enable customers to submit and receive payments later than normal. “Any customer who is waiting for a CHAPS payment to settle today should speak to their own bank,” he said.
The system processes on average 5,000 housing payments every day but with many home-movers involved in long chains, the impact could affect tens of thousands.Reuse content