Plans to privatise the Land Registry have been dropped according to a report in the Mail on Sunday newspaper.
The privatisation would have required new legislation and the paper’s informant said Ministers thought the scheme was ‘just too complicated.’
However the newspaper’s report has not yet been confirmed by the Department for Business, Innovation and Skills. A spokesperson for the Department said: ‘We have carried out a public consultation on the introduction of a Land Registry service delivery company, which looked at a range of options – including the status quo. We will publish the government response shortly.’
The Land Registry has a monopoly on the registration of property titles and registration of transfers, mortgages and other dealings with properties in England and Wales. It therefore has a crucial part to play in property conveyancing although members of the public rarely come into contact with it.
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Selling off the Land Registry could net £1.2 billion or more
The Department for Business has been considering plans to form the Registry into a company which could then be sold off, or to form a joint-venture with a private company. It has been suggested that a sale could net the government £1.2 billion or even more.
The privatisation plans drew fierce opposition from Land Registry staff, who recently walked out in a 48 hour strike. It is likely there would have been further industrial action if the government had pressed ahead with its plans.
Solicitors and other conveyancing professionals have also raised many objections to the plans. In particular they have been concerned that the state-backed guarantee on registered titles might be affected.
There have been concerns that the government would push through its privatisation plans despite these objections following an announcement in the Queen’s Speech recently. So many will be relieved if the plans are withdrawn.
Would privatising the Registry affect ordinary homebuyers?
It is unlikely that privatisation would make much difference for the ordinary homebuyer. However the Registry is currently run as a not-for-profit agency within the DBIS and the level of fees it charges for title registrations and other services is only intended to cover the Registry’s operating costs.
If the work of the Registry was handed to a private company then such a company would want to make a profit. So fees could be greatly increased which would increase the cost of buying a home.
It is likely that privatisation would make little or no difference to time which it takes to complete conveyancing. The Registry has already substantially digitised its records and solicitors can usually obtain copies of property titles and any associated documents within minutes.
Procedures for electronic registration of transfers and other property transactions are also well in hand. However such registrations are dealt with after the handover of the property, and buyers and sellers are not normally concerned as to the speed at which registrations are completed.
The current level of work of the Registry is generally limited by the amount of activity in the property market. There would be little scope for a private company to expand this work unless the Registry was allowed to carry out other work as well – plans have already been put forward for the Registry to take over registration of Local Land Charges which is currently carried out by individual local councils.
But that would require further legislation – and would provoke strong opposition from other companies and organisations already carrying out similar work.
So all-in-all the privatisation of the Registry is something that most people involved in property transfers see no need for and do not want.
It remains to be seen whether the government will actually abandon its plans. Perhaps it may do for the moment – but if a Conservative government is returned at the election next year then it is quite likely the plans will be resurrected.