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CHAPS change makes movers work longer

Jan 07, 2016
The Bank of England has announced an extension to the working day for the Clearing House Automated Payment System (CHAPS), the UK’s high-value payment system used by the major banks to transfer funds including money for property sales. The new longer hours will be introduced in summer 2016 meaning that transactions can take place up to 6 o’clock in the evening.

he banks says the change better aligns the CHAPS settlement day with the typical business hours of many users of the system. Those transferring funds are expected to pass on the full benefit of the extension to their customers by setting later cut-off times.   

President of the Law Society Jonathan Smithers has been reported as saying: "We welcome the decision to extend the CHAPS settlement day. We believe this is a useful and positive step that increases the likelihood of transactions being completed on the agreed date, and lessens the chances of home buyers not being able to move into their new property."  

While this may be good news for the banks and those involved with property conveyancing, for the removal industry it is likely to cause difficulties with crews potentially having to sit around until early evening waiting for completion.  Even with the current cut-off time, crews frequently report having to wait until after 4pm before they are allowed to unload.  This means that crews have to work late and moving companies have to pay unexpected overtime through no fault of their own.  

When the cut-off time is extended even further movers can expect the delays to be even greater.  Yes, it might allow more people to take delivery, but at what cost to the working conditions for the crews who have usually already been at work since early in the morning?  There will, inevitably, be some porters and drivers who will consider this to be a step too far and will be tempted to leave the industry because of the detrimental effect it has on their home and personal lives. Good porters and drivers are hard enough to recruit as it is and this is likely to make the situation even more difficult.  


Matt Faizey from M&G Transport in Solihull is furious about it.  “Ask our great removals staff across the country to start regularly suffering 13 hour days and they will soon walk, and I don’t blame them,” he said.  

Bethany de Montjoie Rudolf, a Legal Services Consultant with De Montjoie Consulting Ltd, that helps the property industry develop systems, training and processes to improve the home moving experience, agrees that this is a potential problem. “I think moving companies are correct and many of the conveyancers are equally concerned as it will no doubt mean their staff staying until 6pm 'just in case',” she said.  “I would recommend that movers add a cut-off time to their terms to prevent them being forced to work until midnight!” 

Lloyd Davies is the operations director for the Conveyancing Association. He said that there is a specified time for completion, typically 1pm or 2pm, so there should be no reason for payments to be delayed as long as the cut-off time.  “Good practice is that the funds are transferred as early as possible that day or even the day before,” he explained.  However he added that when there are long chain transactions, funds sometimes don’t arrive until later than they should.  “The new facility means that it’s more likely people will move during the course of that day. It does allow that level of flexibility that funds can still be transferred if they are late.” 

He added, however, that it was more likely that the completion time could be extended to as late as 6pm when doing a simultaneous exchange and completion. 

Mark Slade from Fidler and Pepper Solicitors in Nottinghamshire appreciated the problems for moving companies but agreed that the change was generally a good thing for his clients.  “When it gets to mid-afternoon it’s a nightmare for everyone,” he said.  “We sometimes get clients sat in reception with crying babies. If we can alleviate that by allowing a little more leeway it will remove a lot of anxiety for them.  [The new regulation] means it’s more likely that the completion will take place on that day even if a little later.” He said that although it would only benefit a small proportion of people it would make a massive difference to their lives. 

Ian Studd, Director General of the British Association of Removers (BAR) said that the change has the potential to impact enormously the moving industry and more importantly on its customers. “It is difficult to understand how the changes can be positive, given that it’s likely that time of access into the new home will be pushed back even later into the day, with inevitable consequences on increasing cost, staff welfare and morale.  The client could well be in the unreasonable position of having to either work late into the night to achieve some level of comfort in their new home or potentially need to fund a night’s accommodation in a hotel thus incurring yet more expense. This regrettable change is, in our view, ill-advised and does nothing to alleviate the problems that have existed for many years, rather it only serves to exacerbate those issues. It is also regrettable that we were not consulted as a key stakeholder in this process and we are making contact with the authorities to express our disappointment and concerns in the strongest terms.” 

The decision to extend the settlement day follows a review instigated in early 2014 by the Bank of England as settlement agent for the major sterling payment and securities settlement systems (through the operation of its Real-Time Gross Settlement (RTGS) infrastructure).  

Minouche Shafik, Deputy Governor, Markets and Banking, said: “This is a welcome step forward for the CHAPS payment system. Extending the settlement day will provide a longer window during which housing transactions can complete.”  

Customers might benefit, but movers probably won’t.  They will be obliged to stay until later rather than return to the depot and deliver the following day at an extra charge.  If they don’t they will, no doubt, incur the wrath of tired and distressed customers.  The only benefit for movers is the opportunity to unload so that the following day’s diary can progress as normal.  But, if packers have been working until midnight, how many will turn in for work anyway at 7.30am? 

Photos: Middle (left to right) Matt Faizley, M&G Transport; Bethany de Montjoie Rudolf, De Montjoie Consulting Ltd; Minouche Shafik, Deputy Governor, Markets and Banking.

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