CHAPS Payment Deadline Changes
CHAPS payments have undergone changes as the Bank of England announced earlier in 2015.
The time for CHAPS (Clearing House Automated Payment System) on the settlement day of a property will be extended from 4:20pm to 6pm this coming summer. The exact date that the extension will come into place is yet to be announced.
The idea is to better align completion days with the hours of a typical business day, and for solicitors and business customers involved in the process this is welcome news. High-value transactions can be made later on in the day and the entire completion process should run much smoother with reduced stress. Yet, other professionals within the property industry have been voicing their concerns.
There is fear amongst estate agents that do not already remain open late on completion days that they may have to remain in office until 7pm on the day of completion to hand over keys. The British Association of Removers has also described the move as “ill-advised” believing that the change will delay the work of removal teams as well as agents. In a recent newsletter, the BAR has voiced a concern that “this may lead to detrimental consequences increasing cost, staff welfare and morale.”
If new homeowners cannot gain entry to a property until later, removal teams may find themselves working longer to finish the move, or if this is not possible customers may find themselves with an uncomfortable first night in their property or the need to check into a hotel for the night, leading to more expense.
Moving companies might even be forced to pay unexpected overtime through no fault of their own. High quality movers and drivers can be in short supply at the best of times and these changes will make their recruitment no easier. Movers might need to consider adding cut-off times into their terms to prevent them working well into the night.
The change has yet to be implemented, so as of yet the consequences are mere speculation, but no doubt movers are going to have to reconsider their strategies and terms of agreement. With summer as one of the busiest periods for removal companies, it looks like the change will be throwing movers into the deep end.