Improving Property Payments: Why are we Waiting?

The SRA consumer protection review notwithstanding, the future of property transactions may be that conveyancing firms no longer hold client money.

As momentum continues to build around the concept of synchronisation, the Conveyancing Association has published a discussion paper that considers the impact for conveyancers of no longer moving property related payments through Client Account.

At this time, true synchronisation (where completion funds are moved at the same instant the property title is transferred) remains a theoretical concept, and may take years to become a reality. Collaborative research such as Project Meridian have explored in detail how synchronisation could work for property transactions.

What’s more interesting in the near term are the changes to banking infrastructure that are taking place today. Putting synchronisation aside for the moment – delivering benefits for conveyancers from these changes should be a core objective for the associations and regulators representing them.

Large-scale changes to the UK’s banking infrastructure have been underway for some time. From May 2025 (recently pushed back from November 2024), conveyancers will be the first to be impacted by new payment requirements, which will affect property related payments in the first instance.

Going back several years, in 2018 the Bank of England published a consultation paper about modernising the UK payments system. The CLC’s response recognised many of the benefits that new banking standards could bring to property transactions, including fraud prevention (which interestingly is described as the biggest driver/argument for synchronisation in the Conveyancing Association’s discussion paper).

Following on from this, in 2021 the Bank of England published a guide for the property sector. It identified four key areas where additional information linked to payments could be beneficial – fraud, transaction prioritisation, reconciliation, and title registration.

The paper is particularly relevant, because it covers how the sector could benefit from these new payment standards without changing the way money is moved. It also challenges conveyancers and the wider property sector to take the next steps:

“The move to ISO 20022 payment messages offers the opportunity to realise a wide range of business benefits through process improvements. But to maximise these benefits the industry will need to collaborate both internally and with the CHAPS community..”

So far, this challenge remains largely unanswered. If conveyancers were able to take BoE’s initial work forward and demonstrate how the movement of funds could be improved in practice, it seems likely that there would be huge benefits.

As fraud concerns appear to be at the heart of the push for synchronisation, prioritising steps that would seek to prevent fraud would seem like a good place to start.

Rather than adopting a “wait and see” approach on synchronisation, associations and regulators should be seizing the opportunity to lead the conversation. By showing what can be achieved using new banking standards alone, the sector would then be in a stronger position to understand any additional value that synchronisation could bring.

About the Author

Matt Pennington is a co-founder of Safe Capital – the trusted secure solution to request, receive or return client money swiftly, safely and securely.

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