Is an Englishman's castle getting a bit less secure?
Coalition reforms include a proposal to privatise the Land Registry which guarantees ownership of our homes.
Saturday 06 November 2010
The coalition plans to part or fully privatise the Land Registry to raise money. But not only could the move add to the costs when you buy or sell your home, it could leave you with a massive gap in protection if there is a mistake in the future.
The Land Registry is an official body that safeguards the ownership of billions of pounds worth of property. At present, if it makes any mistakes about ownership, the Government promises full compensation to anyone adversely affected. But experts are concerned that no private firm could offer the same "guarantee to title".
Last week, the Government published the Public Bodies (Reform) Bill, which deals with abolishing, merging and reforming public bodies and quangos. The Land Registry, a government department established in 1862, is specifically mentioned in the Bill. Meanwhile the Ministry of Justice is undertaking a feasibility study into future private-sector investment in the Land Registry and plans to report back in the New Year. Full privatisation is also an option.
However, there are doubts as to whether private ownership of the body, which holds more than 22 million records of title of land in England and Wales, would result in any benefit to the consumer. The current system allows the public and professionals to have access to a wide range of property-related information, either for free or for modest amounts (see the panel on the right). David Parton, a solicitor for Access Legal from Shoosmiths, is concerned by talk of privatisation.
"The Land Registry is a not-for-profit organisation," he says. "It is inconceivable to imagine that a private company would not seek to make a greater return on its investment, leading to an increase in product and service prices."
He is also worried by the creation of a private monopoly. "Unless the Government considered breaking up the Land Registry, enabling a number of competitors to hold regional control [similar to rail franchises], it is difficult to imagine how homeowners could benefit from what would be a monopoly supply," he believes. "If the service was broken up into regions, these would then have to come up for renewal by tender, creating less certainty among conveyancers and the public as to who they are ordering their services from, usage by the consumer being extremely infrequent."
Similarly, Paul Hunt, the managing director of Phoebus, whose software is used by many mortgage lenders throughout the house-purchasing process, opposes the privatisation of any of the Government's data-collection agencies such as the Land Registry. "I admire its ability to collect data," he says. "As a commercial enterprise, the agency would lose some of its commitment to keeping a national record of Britain's housing stock. If that commitment is forced on it by its articles of association, it will be less competitive than its commercial peers, meaning it would lose out to them. Savings might be made in the short term, but corners will soon be cut in an effort to keep up with rivals. That will not benefit homeowners."
Mr Hunt also argues that any asset sale carried out now would not realise the sort of value the Government and taxpayer might expect. "Don't be fooled by the promise of hard cash," he adds. "I'm not convinced privatisations generate good value for the taxpayer. I am reminded of the privatisation of DERA [the Defence Evaluation and Research Agency] – now QinetiQ – which made a lot of people involved in its purchase a great deal of money at the taxpayers' expense."
Over the past couple of years, the Land Registry has made a concerted effort to reduce costs. It has cut its number of regional offices from 17 to 14, sold its Lincoln's Inn Fields headquarters in the capital to the London School of Economics for £37.5m, while more than 1,800 staff have left in the past two years. It also plans to save nearly £500m during the next 10 years. Supporters of privatisation tend to claim it improves efficiency and drives down costs. However, many professional users of the Land Registry believe it already does a good job.
Julian Sampson, a partner at Wright & Wright solicitors, doubts that change would benefit homeowners. "Whatever the [Land Registry] consultation chooses, it will be concerning to see any form of control change," he says. "The Land Registry has been one of the few self-sustaining organisations in the UK, and in recent months has made a concerted drive to market some of its facilities for commercial use. Other countries have privately run registration systems but frequently this has been driven by the lack of government expertise in mapping or ancillary systems – this is simply not the case here."
David Parton, of Access Legal, agrees that the organisation performs well. "It could continue its journey to become more customer-centric [for] the businesses it supports but generally speaking, its fees and service are already very good," he says. Mr Parton cannot see how privatisation could improve the conveyancing process, adding: "At best, the change would be neutral; at worst, recalling other government outsourcing projects, it could lead to increases in cost and delay."
Last year, the television presenter Sarah Beeny set up the website Tepilo.com with the aim of improving the home-buying and selling experience by helping consumers to avoid using estate agents. She is extremely sceptical that Land Registry privatisation would speed up the process.
"I don't necessarily think the Land Registry holds things up; what does hold things up is the conveyancing process," she says. "Fundamentally, the privatisation of such incredibly important data is risky in itself. It's the sort of data everybody wants and I'm not convinced it should be handed over."
David Parton also believes other Land Registry initiatives which benefit the consumer, but don't necessarily make money, could suffer if it was sold off.
"The Land Registry continues to make strides to combat property fraud and as a single public entity [is] well placed to engage with other stakeholders such as the police and Law Society to drive this forward," he says. "We are concerned that private-sector interests would be less focused on these initiatives or find engagement more difficult. They would likely be more concerned with profit motives." However, advocates of privatisation are confident these concerns can be overcome.
Sir Bryan Carsberg, president of the E-Homebuying Forum, argues that a sensible regulatory framework is all that is necessary. His organisation comprises a number of firms involved in the process of property sales and purchases, and many of them could be interested in fulfilling some of the Land Registry's current functions.
"The first thing would be to make sure important basic services that the Land Registry provides would continue so there would have to be a requirement to do that," he says. "Because it would be a monopoly service, there would have to be some sort of price control. And you need some control on quality of service too, because if you privatise a company and control its prices and not its quality of service, it is sometimes tempted to sacrifice quality of service in order to increase its profits."
However, the greatest concern raised by conveyancers is whether a private firm would be in the position to offer the same guarantees to title that the Land Registry does. Julian Sampson from Wright & Wright doubts how feasible this would be if run on a commercial basis. And it could result in long, protracted disputes about property ownership.
"The fundamental benefit from having a government-run system is the tenet that the consumer has a guarantee to title," he says. "If a private organisation took this forward, such a guarantee – if offered – would surely have to be tempered by insurance. Would we feel secure in our homes as a result?"
All you need to know about your land
The Land Registry registers title to land in England and Wales, records dealings with registered land (for example, sales and mortgages), and, most importantly, guarantees title to registered estates and interests in land.
Members of the public can download a title register from the Land Registry website for £4. That will enable them to establish who owns a property, what price was paid for it, and other stated information for property transactions after April 2000. It also registers any rights of way or restrictions noted on the register.
For the same amount, anyone can download a title plan defining a property. For £6.50, anyone can download an instant Flood Risk Indicator result showing the probability of flood for any registered property. This is produced with data supplied by the Environment Agency.
The Land Registry says its house-price index is the most accurate and independent index of its kind: it is the only index based on repeat sales and includes figures at national, regional, county and London borough levels.
Users can also generate lists of average house prices in any area of England and Wales for any range of months since January 1995. A price index for the area can be created and any two areas can be compared. Homebuyers can also use the Land Registry to research whether houses in their local area have been, or are likely to be, affected by subsidence.
Q&A: What’s the best way to invest for our baby?
Crowd-to-let: How crowdfunding sites can give investors a slice of the property market for £500
Simon Read: 'Seven Families campaign offers an escape from financial and emotional distress'
After the election: What will Britain's financial future look like on 8 May?
General Election 2015: How you vote next week could affect your finances
- 1 Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
- 5 Uploading pictures to find out how old you are gives Microsoft the right to post them wherever they want
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...
Day In a Page
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park