Land Registry to solve the housing crisis?


13 February 2017

It seems unlikely doesn’t it? Nonetheless tucked away amongst the 105 pages of the ‘Fixing our broken housing market’ White Paper was a quick dig (and some suggested reform) of the Land Registry.

It seems unlikely doesn’t it? Nonetheless tucked away amongst the 105 pages of the ‘Fixing our broken housing market’ White Paper was a quick dig (and some suggested reform) of the Land Registry (LR). The same Land Registry that the Government has twice attempted to privatise will now ‘…be modernised to become a digital and data-driven registration business within the public sector.’(See paragraph A30 of the Annex to the report). It’s a bit thin on the ‘how’ but then that’s to be expected of a policy paper. These are some of the issues that the consultation within the White Paper suggests need fixing:

Government will ensure completion of the Land Register

According to the White Paper 83% of the land in England and Wales is registered. Surely getting the last 17% done as well can’t be that hard? It’s worth bearing in mind that land registration began in 1862 and that it has been ‘compulsory’ to register land (following the happening of certain events) in all parts of the country since 1990. Compulsory registration was ‘phased in’ from the turn of the last century because of the sheer number of individual land parcels that would need to be entered into that register and then maintained. Nevertheless, nearly 30 years later nearly 20% of that land mass is still ‘unaccounted for’. And in sheer land area terms that’s a lot of acres. Unless Government is going to compel land owners to register their landholdings (and potentially criminalise those who don’t) this seems little more than an aspiration given that it’s not been a roaring success over the last 150 odd years. There is still a considerable cost associated with carrying out the exercise of registering land, whether on a compulsory basis or otherwise. It involves instructing lawyers to actually assemble the evidence (documentary or otherwise) and then submit it to the Registry, as well as the Registry’s fees for processing it. For a number of reasons, substantial areas of land simply haven't been registered as the landowner has neither time, money nor inclination to do so.

The Government has said that it will publish and list of all publicly owned land which is currently unregistered (so the public are aware that it is owned by a public body) by April 2018 and they will procure registration of all publicly owned land by 2020 with everything else to follow by around 2025. Unfortunately who is going to do this, and how it’s going to be paid for (given that large swathes are currently owned by under-resourced public authorities and government departments) is noticeable by its absence.

Government proposes to improve the availability of data about wider interests in land 

This is an odd policy statement and it doesn't become clearer with further reading. The Government's allegation is that things such as option agreements and restrictive covenants make it harder for local communities to work out who stands to gain from the grant of a planning permission. The report goes on that the Government proposes to consult further on new legislation and discuss with the Land Registry about how to put more information about these things onto the land register.

What’s odd about the policy announcement is that the problem isn’t really one at the Land Registry, and some of it is simply misconceived. Option agreements affecting land are generally easy to find on a registered title as the party with the benefit of the option will specifically apply to note the option against the landowner’s title in order to protect its entitlement to buy at a future date. The Registry will make an entry confirming who applied for the entry of the notice. So what ‘new’ information is Registry going to ask for? At the moment there is no requirement for the applicant to give the commercial details of the option (such as how much it will pay and how and when the option can be exercised) so perhaps the LR will mandate that this information is provided. But quite what a local community can do, armed with that information, is still a bit unclear. It won’t actually enable them to do anything to either secure development on the land or get anything built.

Restrictive covenants are problematic, but that’s often to do with the nature of what they are, not how they’re recorded on the register. In some instances it’s simply not possible to specifically identify land which has the benefit of a restrictive covenant and the issue has taxed lawyers since this class of ‘right’ was recognised in the mid-1800s. That said, one of the later proposals will actually tackle this particular issue head on.

HM Land Registry will make available…its commercial and corporate ownership data set… 
Hmmm, not earth-shattering stuff, not least as LR made it available (albeit on a paid basis to keep receiving the updates) last year. Seeing a bit of the ‘who has what’ will undoubtedly be useful for some, but really only those with the resources (and computing power) to wade through the data on the 3.5 million titles associated with corporations to piece title histories together. For obvious data protection and security issues bulk date on land held by individuals and trusts will not be released, but if the land is registered it’s easy enough to get hold of it by ordering a copy of the register from LR for the princely sum of £3…

…simplify the current restrictive covenant regime 

Now this is probably the only bit that is of interest to those who deal with property on a regular basis. Although strictly speaking it's not actually a new announcement as it was mentioned in the last Queen's Speech. The good news is that Government seems to have given a specific thumbs up to the recommendations in a Law Commission report from 2011 . At 257 pages the report did a little more than just comment on problems with restrictive covenants, it picked up on a whole raft of land covenants and easements which cause all sorts of delay cost and inconvenience when dealing with land. Even more helpfully the Law Commission provided a draft Bill to address many of these in a straightforward way. Now bringing that forward certainly won’t solve the housing crisis overnight, but it would make the process of buying and selling land (so that it can be registered by the nice chaps at LR) a whole lot easier…

STOP PRESS

In the time since preparing this article the LR has joined the fray by issuing its own consultation document on reforms to its internal technical rules. Not surprisingly some of these mirror aspirations in the White Paper. The most interesting though (and potentially the most transformative) is a proposal to enable full electronic conveyancing by enabling the e-signing of documents to accompany their e-submission to the Registry. The proposal has lain dormant in the Land Registration Act 2002 which created the necessary legislation, but which has never been implemented through enabling Regulations. Provided adequate security and anti-fraud measures form an intimate part of that design, it could well be a step towards bringing a traditionally paper-heavy process into the 21st Century.

The content of this article is for general information only. To discuss the Housing White Paper, please contact Marcos Toffanello or a member of Birketts' Planning and Environmental Law Team. Law covered as at February 2017.

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Marcos Toffanello

Head of Knowledge Management

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