Insfrastructure Bill [HL]

Written evidence submitted by the Council of Property Search Organisations (CoPSO) (IB 04)

Council of Property Search Organisations (CoPSO)

The Council of Property Search Organisations (CoPSO) is the major trade association for the property search industry, representing over 100 businesses across the country involved in property searches. Our members include water companies, environmental search providers, and organisations offering local searches. A broad range of property search reports are undertaken on behalf of individuals and organisations, including water companies, environmental search providers, and organisations offering local searches. These searches are an essential part of the home buying process and are also used for property development purposes.

Executive Summary

The proposed changes to centralise Local Land Charges Registers have not been thoroughly considered and will jeopardise hundreds of jobs and businesses which rely on the Local Land Chargers Registers to provide searches. This will also negatively impact on the housing market, causing delays to the home buying process which in turn will result in housing transactions falling through. CoPSO understands the need to digitise the register but it is clear the government have not considered all viable options and appear to be even unwilling to listen to alternative solutions. The sector is currently operating well and there is no clear implementation plan transferring the Local Land Charges Register to the Land Registry. The government’s suggestion that the views of seven local authorities (LAs) involved in a trial scheme represent the views of the wider community of LAs is disingenuous – the vast majority are strongly opposed to the changes. The Land Registry has acknowledged that LAs would continue to be responsible for inputting Local Land Charges data but they would no longer receive any compensation for this. Further, they will continue to produce CON29 data searches – further primary legislation would be needed to extend the centralisation of such data. Proposals to centralise the Local Land Charges Registers are counter-productive and will not speed up the home buying process for consumers.

Current System of Land Registry Searches

The Land Registry currently sets out two types of searches as part of the standard process for purchasing property and land, Local Land Charges (LLC1) and a CON29 search. LLC1 searches utilise the Local Land Chargers Registers and highlight a range of areas of notice including listed buildings, conservation areas, financial charges on properties and tree preservation orders. Property search organisations, which CoPSO represents, undertake these searches following requests from individuals and organisations and via contractual arrangements with Conveyancing lawyers. The second set of searches, known as CON29 cover building control regulations, planning history, gas pipelines and other related property information and are usually made alongside LLC searches. The data for both LLC1 and CON29 is collated by LAs, which have responsibility for the Local Land Charges Registers. These registers contain detailed local knowledge which provides individuals and organisations undertaking searches with the high quality information they desire. Centralising this data would inevitably lead to a loss of local knowledge and information, resulting in poor quality reports and increased waiting times. The current system functions well and utilises the knowledge of Local Land Chargers Officers to provide these outcomes, which are essential to organisations and individuals and are an integral part of the land and property buying process.

Background: Consultation Response – Changes to the Land Registry

In January 2014 the Land Registry published a consultation on proposals to expand its regulatory powers and centralise the Local Land Charges Registers that are currently maintained by all LAs in England and Wales. [1] The response to the consultation was overwhelmingly against the proposed change to both centralise the Local Land Charges Registers and the extension of powers to the Land Registry. Some important findings from the consultation include:

· Out of the 627 responses to the consultation 51% strongly disagreed and 15% disagreed with the perception that the Land Registry would benefit from reforms

· 82% thought that the Land Registry had not considered all feasible options

· 83% disagreed with the Land Registry taking over the Local Land Charge registration functions of LAs

· 53% disagreed with the creation of an electronic process and providing digital information through a single registering authority

Despite the substantial opposition to the proposed changes, the government’s subsequent publication of its consultation response on 16th June 2014 [2] confirmed the proposals to amend the Local Land Charge Act 1975 to enable Land Registry to hold and maintain the Local Land Charge Register, despite the overwhelming negativity of the consultation responses. The provision was included within ‘Her Majesty’s Land Registry’ section, part of the Planning, Land and Buildings section of the Infrastructure Bill.

Detrimental Impact of Land Registry Changes

We believe that if Local Land Charges Registers are centralised under this legislation, there will be a detrimental impact to the housing market and to the currently thriving business sector which currently undertakes these searchers.

Key concerns with the proposals include:

· These businesses include hundreds of SMEs and microbusinesses which may ultimately go out of business as a result of the centralisation of the register. Given that these businesses are vital to creating a competitive and user friendly process, there is real concern that the centralisation of the Local Land Charges Registers will create a monopoly which will see the cost of searches and the time taken to undertake these increase. This will directly impact the individuals involved in the home buying process as well as the UK housing market and economy. The Government have rushed these proposals and have not considered the sector’s substantial opposition, nor have they considered the wide range of far better alternatives available.

· The process has not been thought out and will pose additional restrictions on LAs wishing to seek information on an updated registry, requiring them to apply to the National Land Registry for registration of information already contained on local registers.

· LAs will still be required to collate the data for LLC and CON29 despite having their funding cut at a time when authority budgets are already under increased financial pressure. Furthermore, LAs may be required to pay compensation to local providers if they are required to end contracts prematurely.

· The sector is currently operating well, with healthy competition and the so called ‘postcode lottery’ claimed by the Land Registry simply does not exist. Interference is therefore unnecessary and heavy handed.

· Furthermore, the Land Registry have acknowledged [3] that LAs would continue to be responsible for CON29 data searches, and further legislation would be needed to extend the centralisation of CON29 data. This would be at the expense of the taxpayer and would be a further hurdle for LAs to overcome

· The sector is comprised of SMEs and microbusinesses which will be disproportionately affected and many will go out of business in what will ultimately be a Government sponsored transfer of activity to a sector monopoly. This goes against the Government’s stated commitment to support SMEs, which may be forced out of business due to these proposals, costing jobs in local economies and leaving a sector at the behest of a centralised system, with all the downsides that entails.

· Searches of the Local Land Charges Registers are an important part of the home buying process. If the Land Registry project failed (as so many of their projects have done in the past) there could be significant damage to the property market. Further, the threat to LA jobs may result in greatly increased waiting times for searches which would in turn lead to more deals falling through, resulting in a huge detriment to the housing market. This has already occurred in Leicester where three members of the Land Charges unit resigned as a block citing the uncertainty caused by the Land Registry proposals.

· The government claim the LAs involved with the trials have had success; however there were only seven LAs involved in pilot schemes (Sefton, Liverpool, Denbigshire, Newark & Sherwood, Swindon, Havant and Watford). The government’s consultation response as well as CoPSO’s own engagement with LAs has revealed however that the vast majority of LAs are opposed to the changes. CoPSO contacted every LA and of the 83 responses received, 54 said they were very concerned about or completely against the changes.

· The Land Registry’s consultation response showed overwhelming opposition to the proposals. 51% strongly disagreed and 15% disagreed with the perception that the Land Registry would benefit from reforms. 82% thought the Land Registry had not considered all feasible options.

Alternative Solution to Centralisation

The proposals to centralise the Local Land Charges Registers are unnecessary given that there is already a well-functioning and competitive market. Given that the government has now ruled out privatisation of the Land Registry, there is now no reason to implement these changes. Whilst the idea to digitise local land searches is sensible and in keeping with the government’s digital agenda, there are more straightforward ways to carry this out which would not result in the loss of multiple businesses that currently carry out local land searches, most of which are SMEs.

CoPSO contests the Land Registry’s claims that alternative solutions have been adequately assessed. In fact, in its consultation response the Land Registry admitted that 82% of respondents believed that the Land Registry had not considered all feasible options. If the Government is intent on pursuing its digital ambitions in this area, then there are far better ways to achieve this. This solution includes:

· Based on data from LAs and the Land Registry, CoPSO proposes that digitising the estimated 40 LAs who have not yet done so by requiring the practise by statute and setting a fee of £12 for the provision of LLC1 in England.

· The estimated cost of this would be under £10 million according to estimates from companies who have already digitised 300 authorities. This would save a considerable amount of money as the Land Registry has wasted over £85 million on its last three failed projects alone. The initial proposals to centralise LLC1s cost £48.5 million.

December 2014


[1] http://consultations.landregistry.gov.uk/consult.ti/LLC1/consultationHome

[2] https://www.gov.uk/government/consultations/land-registry-wider-powers-and-local-land-charges

[3] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368496/LLC_Impact_assessment_Ref-BIS_LR003.pdf (ibid., p13, section 5.4 250 ibid., p20, section 9.3.2)

Prepared 17th December 2014