Conveyancer are reminded the inclusion of ‘purpose codes’ for property transactions, as mandated by Bank of England (BoE), will come into effect this week. The introduction of the new requirement, part of a move to a new global standard in payment messaging, had originally been set for introduction in November 2024, but was delayed to 1st May 2025.
Purpose Codes are an attempt to classify the reason that money is moving between two bank accounts. The inclusion of additional data will help prevent money laundering and financial crime, say BoE, making it more difficult to move money without clearly identifying parties to the transaction.
The new standard, ISO 20022, is a standard which requires a greater depth of data be provided as part of making payments improved efficiency, payment prioritisation, and prevention of financial crime adds BoE.
Firms should already be using Purpose Codes for some of their transactions and should be selecting the correct code for CHAPS payments when the payment relates to the items below:
| Purpose Code | Classification | Name | Description |
|---|---|---|---|
| HLRP | Finance | Property Loan Repayment | Transaction is related to a payment of a property loan |
| HLST | Finance | Property Loan Settlement | Transaction is related to the settlement of a property loan |
| PLDS | Finance | Property Loan Disbursement | Payment of funds from a lender as part of the issuance of a property loan |
| PDEP | Finance | Property Deposit | Payment of the deposit required towards purchase of a property |
| PCOM | Finance | Property Completion Payment | Final payment to complete the purchase of a property |
| PLRF | Finance | Property Loan Refinancing | The transfer or extension of a property financing arrangement to a new deal or loan provider, without change of ownership of property |
From 1st May the Bank of England will also encourage the use of codes that are indirectly related to property transactions, for example:
| Purpose Code | Name | Definition |
| PTXP | Property Tax | Transaction is related to a payment of property tax |
| PPTI | Property Insurance | Transaction is a payment of property insurance |
| BLDM | Building Maintenance | Transaction is related to a payment associated with building maintenance. |
The changes are expected to minimally impact firms who make CHAPS payments manually through online banking, with the option to select a Purpose Code from a drop down list via the bank. However, the changes will impact firms who export bulk payments lists from case management or accounts platform, and upload them for CHAPS payments.
In addition to the mandated codes above, more information relating to optional and future Purpose Codes can be found here.
