The Land Registry is aiming to achieve ‘comprehensive registration’ of property in England and Wales by 2030. Peter Williams looks at what this might mean
According to last year’s government white paper, Fixing our broken housing market, the Land Registry is to become the world’s leading land registry for speed, simplicity and an open approach to data, and will aim to achieve comprehensive registration of land in England and Wales by 2030. This is a key component of the Land Registry’s current business strategy.
HM Land Registry was set up in 1862, more than 150 years ago, with the aim of making conveyancing simpler, faster and cheaper. The most populous areas of the country became areas of compulsory registration at various times between around 1900 and the 1970s but it was 1990 before every property acquisition had to be registered at the Land Registry.
As of April 2018, more than 85% of the land mass of England and Wales is now registered. The Land Registry accepts that it will never reach 100%, so the target is now “comprehensive” rather than “total” registration. The initial priority is to register any publicly owned land that can be used for housing and development purposes in the areas identified as having the greatest housing need by 2020 (with the rest to follow by 2025). This will make it easier to identify where there may be surplus public land that could be available for housing development.
To register or not to register
The government wants to encourage voluntary registration of unregistered land. Land is immoveable and cannot be hidden. Ownership is easy to trace when the title is registered since the proprietor’s name appears on the register. Since 2016, the beneficial ownership of UK companies has had to be recorded at Companies House. It is currently still possible to conceal the true beneficial owner by using a company that is registered overseas. However, the government is planning to set up a mandatory register of owners of overseas companies that own land in the UK in 2021, after which this will be far more difficult.
Registration brings benefits for landowners as well. Proving title and identifying encumbrances (such as restrictive covenants) is easier since nearly everything appears on the register (although a complex unregistered title tends to become a complex registered title). Furthermore, it is very unlikely that an owner of registered land will lose it to squatters. A squatter who occupies unregistered land for 12 years effectively becomes the owner. This is not the case with registered land, making registration particularly attractive to organisations that own large tracts of open land. Registering land voluntarily makes it simpler to sell in the future, and there are stories that some conveyancers are refusing to let their clients buy unregistered land, requiring the seller’s solicitors to register it voluntarily first. The numbers of conveyancers with experience of unregistered conveyancing is dropping, which might be one explanation.
It is only fair to point out that there are some disadvantages to voluntary registration of unregistered land. There will be registration fees based on the value of the property. These are discounted as an incentive to register voluntarily, but they can still amount to hundreds or even thousands of pounds. Perhaps more importantly, registering land makes the identity of its owner visible to the world, and in the worst case could lead to the sort of fraud that has been highlighted very recently in P&P Property Ltd v Owen White & Catlin LLP and another and Dreamvar (UK) Ltd v Mishcon de Reya (a firm) and another [2018] EWCA Civ 1082; [2018] EGLR 27. There are frequent stories of fraud all seeming to involve registered land, where the name and address of the registered owner is in the public domain, and there are no longer any paper title documents. In contrast, it is much more difficult for fraudsters to pass themselves off as owning unregistered land. The Land Registry’s property alert service goes some way to alleviating that risk.
Comprehensive registration
As mentioned above, registration of land has been compulsory following a purchase of land anywhere in England and Wales since 1990. Since then, changes have been introduced to make it necessary to register unregistered land when inheriting it or mortgaging it, with the aim of increasing the occasions on which land has to be registered.
But the Land Registry is not going to leap from 85% of land being registered to 100% (or thereabouts) by registering the relatively few remaining houses that are still unregistered. The emphasis must now be on landowners with large property holdings, such as government departments, local authorities, educational institutions, the National Trust, companies and other landowners who tend to hold on to their land on a long-term basis. The Land Registry has a public sector engagement team, which will be contacting local authorities this year, helping them to identify any land that is not yet registered and (according to the Land Registry in a recent blog article) “working with them to make the registration process as streamlined as possible”.
Will this voluntary approach work? Might it become necessary in future to impose some less voluntary solution? Could we see a requirement on owners of unregistered land to register it compulsorily even where it is not being sold? That seems to be the only solution to achieve comprehensive registration, but it is fraught with difficulties. How would people hear about it? Who would pay for the legal work that would be required? And what would be the sanction for failure to register in such circumstances? Clearly the land cannot be confiscated. Perhaps there could be a sanction that land is not capable of being sold until it has been registered – but that doesn’t assist with comprehensive registration as the land would remain unregistered, and anyway it is not much of a sanction since the land would need to be registered in any case after a sale takes place.
I remember attending a series of workshops at the Land Registry some 20 or more years ago to consider this question, and no solution was found back then. It will be interesting to see whether the government and the Land Registry can solve the problem this time around.
Peter Williams is a real estate professional support lawyer at Shoosmiths
