Press release:
Economic growth is not easy to create
There are many reasons why – but one sits in a government office in Croydon, South London. And you need not have transacted a commercial building to know them well.
Anyone who has ever bought a home will know exactly what HM Land Registry does – and how well it operates.
These days, the Land Registry isn’t operating so well. In fact, we – along with our counterparts at the British Property Federation – are worried it has become a hurdle to economic growth.
In short, there are unhelpful delays in updating the legal ownership of property in England and Wales. Many of our fund manager members cite waits of 18 to 24 months for bigger real estate transactions.
Registering land matters. It provides proof of ownership. backed by the State. It’s supposed to make it easier to invest in property.
This government department hasn’t operated smoothly since the Covid pandemic in 2020. Everyone suffered back then. But since that point the Land Registry has also had to accommodate new economic crime obligations, following the Russian invasion of Ukraine.
Limited resource plus more work equals backlogs.
A high hurdle
And these delays have several consequences.
They are a drag on productivity and growth. We and the BPF estimate British lawyers are now spending an additional 12,000 days a year simply chasing the Land Registry.
Transaction costs and risks are up. It takes time and resource to track the owner of a property. And what happens when a seller is not able to wind up the company that owned the property? Another unproductive use of resource, and ultimately a drag on growth.
If you have purchased a property, but are yet to be named the legal owner, you cannot engage with utility companies, you cannot issue break notices, you cannot … the list goes on. This is a perfect storm for landlord-tenant relations.
The optics are also poor. The pandemic started five years ago. Are estimated completion dates for 18 months’ hence now the new normal? We hope not – for our members sake. And it’s hardly a good advert for the UK as an international investment destination.
Removing the hurdle
A blend of interim and long-term solutions could get the Land Registry back in the black – and supporting growth.
For example, perhaps they could look at the fees they levy? These increased recently for the first time in 10 years. Might there be scope for additional, specific fees for larger deals – and also for expediting transactions?
The main issue though is resource. Is there one-off resource that central Government could deploy in the short term? Such workers could perhaps handle simpler requests, allowing more experienced regulars to handle the complex ones.
And they could certainly do with recruiting more permanent staff – and training – otherwise the backlogs will never go away for good.
Aside from human resource, the Land Registry should invest in technology to boost service levels. The property world more broadly is digitising and automating – and practitioners are thinking about the more practical applications of artificial intelligence. We know HM Land Registry aspires to a more digital offering and we hope they can accomplish it.
None of the things we suggest here is overly costly.
And there are other, low-cost possible remedies for transactions caught in the backlog.
Caseworkers could talk directly to applicants’ lawyers about outstanding requisitions; someone could devise a mechanism to reinstate ‘cancelled transactions’ in the right point in the queue (now, they’re just knocked back to the start); the Land Registry should process older cases first, except where it makes sense to process a more recent one.
Overall, it would be very helpful to see more transparency.
For example, tracking an application’s progress is not a simple task. If the Land Registry’s day list entries held more detail it would assist just about every stakeholder.
It would also help to have more clarity over the way the organisation prioritises applications. If you’ve just purchased a shopping centre, your asset managers need to get to work right away. You don’t need me to tell you about the opportunity cost created by delays.
Can such large asset applications, with all the benefits they could bring to economic growth, be prioritised? At least for a trial period.
The issues in Croydon, and across HM Land Registry’s sites, are troubling – and a genuine source of worry.
There is good reason to be confident they will resolve the issues in the long run. But in the short term it would be good to see backlogs of 18-24 months reduced to maximum of 3 months.
Unlock this and we can all inch closer to economic growth.
View the article on the Green Street website here.
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