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Why bank blunders can turn your house move into a living nightmare

<span>Photograph: Martyn Evans/Alamy</span>
Photograph: Martyn Evans/Alamy

It was nine days before Christmas and Kate Ross and her young family were on the road from London to their new home in Worthing, West Sussex. But instead of moving in, a banking error left them in limbo with a baby, a toddler, a cat and a dog and two removal lorries. Four days passed before they eventually obtained the keys, during which time they racked up storage and transport costs of £3,600.

Ross’s saga is extreme, but not unusual. A processing glitch meant that the funds transferred by her buyer did not reach her solicitor’s account until four days after completion day, with four households in the property chain stuck in expensive purgatory.

According to the British Association of Removers (BAR), delays on completion day are commonplace while the transfer of funds is confirmed. Most are hours, rather than days, but the impact on households and their purses can be enormous.

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“It happens very regularly. We rock up to the property and can’t get in,” says BAR’s director general, Ian Studd. “Up to a quarter of completions are delayed, half by more than two hours. On any given Friday there’s a fleet of removal lorries outside new homes unable to get in.”

Banking delays are the main cause. Money from buyers sent by the CHAPS payment system is only guaranteed to arrive on an appointed day, not at an appointed time, and even short delays by banks can have a knock-on effect in a long chain of buyers and sellers. Stringent money laundering checks, requiring scrutiny of certain transfers, can further hold things up.

Completion can be scuppered if a buyer’s payment reaches the seller’s solicitor after 4pm, as there may not be time to redeem the seller’s mortgage before the CHAPS system shuts down. For completions falling on a Friday, the most popular day, buyers can be left stranded until Monday.

It was a Friday that Ross and her wife chose to start a new life by the sea. “Our solicitor informed us our buyer had transferred the funds at 10.30am, but, three hours later, they had yet to be received,” she says. “By 4.30pm, it became clear that nothing was going to happen and we were faced with nowhere to stay for the whole weekend and what to do with two truck loads of our possessions.”

It happens very regularly … we rock up to a property and can’t get in. Up to a quarter of completions are delayed, half by more than two hours

Ian Studd, BAR director general

The removal firm was unable to find storage in Worthing, so the loaded lorries were driven back to the its London depot. The family could not check into a hotel because of the pets, and was forced to spend the weekend with a sick relative an hour’s drive from Worthing.

They had to buy emergency essentials, pay for their belongings to be stored, and for the removals team to remain on standby.

The money still had not reached the solicitor’s bank on the Monday, and time was running out. The lenders in the chain required mortgage advances to be returned by the end of the Tuesday if completion failed and, because of Christmas, funds could not be requested again until New Year.

“It was agreed, across the chain, that if the missing transfer had not appeared by 12.30pm on the Tuesday, we’d postpone completion until after Christmas,” adds Ross. “12.30pm rolled round and the money had not appeared, so we loaded the children and animals back into the car, and I was dropped at our old house to meet the removal men and unpack, while the rest of the family drove to my parents in Lincolnshire where we’d made emergency arrangements to spend Christmas.”

As Ross reached her old home, the call came to say the funds had been located. The removal lorries had to be diverted back to Worthing. At 4pm, in the nick of time before the loans had to be returned, the chain completed.

The family finally moved in on the Wednesday, with three days to unpack before Christmas.

They are still waiting for an explanation and an apology from Santander, their solicitor’s bank, which caused the delay. “Our solicitor lodged a complaint on our behalf in January, but we are no nearer to getting compensation for our expenses and stress,” says Ross.

Santander agreed to refund £3,800 expenses and pay £1,000 in “goodwill” after the Observer intervened. “We are very sorry that, due to a processing error at Santander, there was a delay to the funds being transferred,” it says. “We appreciate this must have caused a great deal of stress.”

Ross’s conveyancing solicitor, Lawcomm, describes Santander’s service as “unacceptable”. Director Bill Dhariwal says: “I sincerely hope Santander learns from this and does not put any more of our clients through the same suffering.”

Buyers the full length of a property chain face more than storage and transport expenses if completion is delayed. If a deposit fails to arrive in time, they are deemed in breach of contract and can be held liable for the seller’s costs, plus substantial daily interest payments on the purchase price.

Buyers all the way up the chain can find themselves having to compensate their sellers if the purchase is delayed at the bottom. If the problem was caused by another buyer’s or solicitor’s bank, they may struggle to claw back the money, since they are not the bank’s customer.

In 2018 the government pledged to work with conveyancers and lenders to speed up the release of funds for property transactions. Representatives from legal, finance and removal sectors have formed the Home Buying and Selling Group (HBSG) to lobby the government for best practice guidelines so that companies who delay can more easily be held to account.

“Compliance requirements are far more onerous so banking systems need to catch up,” says Ian Studd, founding member of HBSG. “There also needs to be more education for consumers to ensure funds are remitted in advance and there’s a window of 10 working days between exchange and completion.”

The Department for Levelling Up, Housing and Communities says: “The levelling up white paper committed to improving the buying and selling process and we are working with the industry to roll out a new digital system. This includes speeding up the transfer of funds and ensuring more information is available to purchasers.”