The Barclays IT chaos and a service outage last week left a family “homeless” after their house purchase was derailed.
Civil Servant Paola Mereu, 39, sold the house her and her husband and their two daughters, aged one and seven, lived in at Uxbridge.
The family were meant to purchase their new property in West Sussex on Friday. But major IT glitch at the high street banking giant, which is rivalled by the likes of Lloyds, Santander and Nationwide, hit thousands of customers – including the family.
Mereu told the press: “We drove down to (West Sussex on Friday) and we had all our things in a moving van and were waiting outside and unfortunately, around one o’clock, my solicitor calls and says Barclays is having some issues and we are unable to complete the sale.
“So we sold our house – we had the money from that – but we were unable to complete the other part of the sale so we are essentially homeless. We waited until five o’clock, Barclays still didn’t fix it, so we literally have no house and it is still not fixed.”
“I am not sure if we will incur extra costs from the people we are buying from because we did not fulfil our part of the contract as the money was meant to go though on Friday,” she added. “It’s crazy, we are hoping the issues are resolved by Monday.
Barclays started to incur problems at approximately 10.30am last Friday, and whatever the problem was, it was not fully fixed until Sunday 2nd February 2025.
“So many property transactions would have been affected by the Barclays banking outage on Friday 30th January 2025,” said the managing director of Convey Law, Janine Wellington. “It became a day of chaos, upset and a reality check of the importance of relying on the banking system in a conveyancing transaction.”
With monies stuck in systems and property chains hopelessly at the peril of the banking system, home movers were literally waiting removal vans, according to Wellington, who has praised conveyancers for the way in which they handled the crisis.
She explained: “What was great on Friday was that the vast majority of our fellow Conveyancers reacted immediately and appropriately, and in their clients’ best interests, and organised their occupation of their new properties, pending the arrival of funds.”
But Wellington was surprised to hear that a few conveyancers were unwilling to move clients into their new homes using the Standard Conditions of Sale 5th Edition. Clause 5.2 allows for early occupation, on a licensee basis, pending completion on the terms set out within that clause.
She added: “I have used Clause 5.2 confidently and successfully (perhaps with the addition of a legal undertaking here and there) on many such occasions during my conveyancing career. The clause covers what is needed to protect the parties to the contract and allows for immediate occupation of the property in such circumstances.
“It was truly inspiring to see the industry come together to ensure that a banking glitch did not spoil the moving day experience for our clients and cause huge inconvenience, upset and additional costs. I dare say that Barclays will have a very large compensation bill to pay for late completions, and in support of those few Conveyancers who didn’t use Clause 5.2 for their clients or their purchasers.
“Let’s hope that, should (or ‘when’) a banking system fails our conveyancing transaction next, we once again all pull together, use our legal heads, and provide immediate, practical short-term remedies for our clients – Clause 5.2! Well done everybody and thank you for your wonderful support on such a difficult conveyancing day.”
And yet Conveyancers won’t use 5.2 across the board to allow clients to move in sensibly each day.
No. Instead they’ll let clients, and thousands of moving company operatives sit and rot for hours on end due to their incompetence.
This debacle serves to highlight that if Conveyancers had true faith and competence in their own, and their colleagues abilities every client could move in from 1pm.
The irony is strong.
Irony that will serve only to further demotivate and demoralise even further moving companies employees.
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I vividly remember, as a young 22/23 year old Neg, having two rather large and intimidating buyers looming over my desk at 5pm on a friday as I desperately tried to get hold of their sellers solicitor to confirm that we had key release. He told me that they still did not, but that he would chase it all again and call me back. There were many demands from the buyers that I hand over the keys, and when I told them I couldn’t that I just get the keys ‘ready’ to hand over and then ‘go and do some filing for 30 seconds’ in which case I wouldn’t have handed them over so I couldn’t get in trouble! As if allowing keys to be stolen wouldn’t be just as much of a black mark!
The solicitor called back at 5:15 and told me to release them. When I drove past on my way home and hour later, they were sitting in the vans outside as the vendors hadn’t finished packing!
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It isn’t as easy as it appears to non property lawyers. Lender consent is often required (and is difficult to get quickly), and the building’s insurance position needs looking at (another difficult, time consuming task).
For the ultimate seller at the top of the chain there is very little benefit and a certain amount of risk. And when the pros and cons are explained to clients not all in a chain agree to proceed on the 5.2 basis.
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It would have been interesting if Barclays had declined consent for any 5.2 transactions…
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@Rob Hailstone – Janine Wellington claims clause 5.2 or the Standard Conditions of Sale 5th Edition sets out the terms for early occupation on a license (to occupy?) basis, and that she has used it successfully with the occasional addition of a legal undertaking. What are the risks or burden that prevent this being used routinely across all or only chain-free transactions? I assume lender’s consent could be requested in advance as a matter of course at the same time the COT is submitted.
Might one issue be the seller having the trouble of evict a licensee who fails to complete on time? Would that be difficult? Might the cost be covered by the deposit, and any other further loses sought via the courts?
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Without wishing to sound dismissive, 5.2 is, for a number of reasons, an occasional solution to an occasional problem, unfortunately it is not designed for everyday use. As we all know a possible solution to late completions is for all conveyancers to endeavour to be in funds 24 hours before completion.
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It is a legal mess if you allow people in on licence when there is uncertainty as to whether or not monies will be handed over. Getting them out of the property is also expensive in litigators fees (who cost way more than conveyancers) and what happens if they damage the property in the interim?
So much for technology being the saviour to all of our conveyancing woes. This just goes to show that lenders need to have secure systems for dealing with monies too and perhaps take some liability if there are issues such as this one.
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