Rumblings have been building for a while now, initially just whispers in dark poorly lit rooms but now a fierce and growing debate. At first these rumours were easily dismissed but it’s become increasingly hard over the last 6 months to ignore the continuing rumours that we are set for privatisation of the Land Registry.
We refuse to enter a political comment on this blog but will set out below the current understanding and potential impact privatisation of the Land Registry could have on the housing market.
The biggest fear for most people is that privatisation will mean that personal data of homeowners is up for sale to the highest bidder. Privatisation will by its very nature create conflicts of interest and put the integrity of the title register under threat.
The Guardian reported last week the growing fears that there is going to be an artificial scarcity of land in order to distort the housing market, limiting building and “incentivising acquisition of land”. It was revealed in 2014 that that there were at least six firms of land agents holding strategic land banks of 23,000 acres (enough for 400,000 homes at current building densities). The concern is that non-developers are holding the land in anticipation of future land values as developers run out of land and prices continue to increase. The BBC Trust Chair has called for the Land Registry open up information on ownership as a way of creating more transparency in the market. If Privatisation goes ahead, it unlikely that there will be greater transparency as land data becomes more valuable.
At current estimates at least 15% of land remains unregistered. This land is often owned by old aristocracy or offshore trusts which hides legal ownership. The Guardian estimates that hundreds of thousands of acres have not changed hands since 1925. The deadline for full registration was 2011 but this has clearly not been met.
The Law Society is the latest to add its voice of disapproval of privatisation stating, “The Law Society is not convinced, from the information supplied to date, that sufficiently robust safeguards will be imposed and successfully enforced if the Land Registry’s operations were sold off. Without solid assurances on these issues, the Land Registry should remain in public ownership”
Fortunately the opposition to privatisation is growing daily and although the consultation process is now closed nearly 300,000 people signed a petition opposed to the sale.
At the time of writing, no decisions have been made by the government but berg will continue to monitor and keep you updated when a decision is made.
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To find out more about the issues raised in this post, or to discuss any queries please get in touch with our Real Estate team on +44 (0) 161 829 2599.
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.