Buiding society hold funds from property sale for ten days?

anna1234567

Buiding society hold funds from property sale for ten days?


Hi everyone, I was recently informed that when the funds from a property our transfered from my solicitors account to mine that the building society will hold the funds for ten days yet a bank will not?

Can any of you fine folks tell me if I am being mislead? I've searched and cant find anything

Thanks, Anna

MarkyMarkD

I'm not sure what you mean, anna. Are you selling, or buying? Are you talking about your new mortgage lender or your old one?

anna1234567

Hi Mark, I've sold my house, the completion date is the 27th, sorry.

MarkyMarkD

So, the money from the solicitor will go to the lender to clear the mortgage on the 27th. Any surplus funds will be held by your solicitor and they'll give it to you when they think they've finalised anything.

I'm still not sure why you say that the lender would hold the money for 10 days - once your mortgage is cleared, it's cleared. End of story. And your solicitor shouldn't give them more money than they require for redemption.

anna1234567

I own two properties, i paid a builder to split my house in two. I have enough equity in the second property to continue the mortgage and not pay it off. The buyers money goes into my solicitors account on the 27th, it then goes to my account. I was told that if the money for my house is put in a building society (my account) and not a bank, it is held for ten days.

Sorry for being a pain.

Alan_M_2

I can only think this is an issue with building societies who are not clearing banks, they actually have to contract out their clearing to banks and as a result it takes 10 days for deposits to clear in many of them.

One reason I simply won't entertain the idea of using a building society for my personal or business banking.

anna1234567

Thanks everyone, anyone who is selling their house needs to know about this problem as it could cause major headaches. One last question if you don't mind? Is Abbey National still classed as a building society?

LisaT186

It does sound like the clearing process

No - Abbey is a bank

Alan_M_2

Whilst Abbey is probably technically a Bank I'm reasonably sure it still has to outsource it's clearing to one of the Big Four Banks.

Maybe an insider can enlighten us?

You really need to stick to one of the historic Banking names to guarantee banking status, HSBC, NatWest, Lloyds etc.

owned_by_2_Siamese

Abbey is a clearing bank (sort codes start 09 XX XX) many years ago (15?) the Co-op bank used to do its clearing for them, now however they are a full clearing bank - however (!) most clearing banks now use a third party processor to actually do the clearing (iPSL) this includes most of the high street names.
Rather than clearing issues, I suspect that as a matter of policy they are holding funds for this period as a protection against fraud - thats to say to make sure that the transaction completes and a margin of time in case of recourse. Each bank will have its own policy on this (for example they have differing times from when funds are paid in an dfull withdrawal can be allowed.)
My advice is to specifically ask Abbey about your transaction (get it from the horses mouth) Also ask about CHAPS transfer (aka telegraphic transfer) where cleared funds are remitted from the solicitors bank to your bank on the same day - the institution will then usually (check) allow you access as soon as they are recieved (unlike a cheque transfer where there is post and clearing delays) - expect to pay upto £30 to your solicitor for this type of transfer.