The changing conveyancing landscape
In recent years, the Government has placed increasing emphasis on reforming conveyancing to improve efficiency, control costs and reduce the number of transactions that fall through. Much of this attention has focused on leasehold property, management companies and historic building-safety issues – matters that disproportionately affect cities with large numbers of high-rise buildings, such as London, and often attract significant public interest.
Successive layers of development and legislation have created a complex, multi-tiered property landscape. Navigating it now requires, more than ever, the support of knowledgeable and highly skilled legal advisers.
Digitalisation: the bigger story
As a specialist residential property solicitor with more than 20 years’ experience, I believe the most significant development has been digitalisation. During that time, I have seen impressive advances and some remarkable results. However, substantial challenges remain.
Land registration: a vital foundation
The Land Registration Act 1925 introduced the framework for creating and consolidating legal title through public registration. This transformed property ownership: although many properties still remain unregistered, most land and its legal owners can now be identified readily for a sale or purchase.
Progress is nevertheless constrained by an under-resourced Land Registry and a chronic backlog. Complex applications – including first registrations, new-build registrations and title splits—can take more than 18 months. For a brief period, the Land Registry achieved turnaround times of 48 hours for straightforward applications. Since then, Brexit, the pandemic, changing political priorities and economic instability have affected performance.
Greater investment is needed to support the Land Registry’s essential work and ensure that its processes continue to evolve alongside technological change to adopt better practices.
Electronic identification and onboarding
Electronic identification and client onboarding have advanced rapidly since the pandemic. Many people now use smartphones and digital platforms to engage more easily with the conveyancing process, and the public has become increasingly confident with the technology.
As a result, clients can often begin a matter without visiting a solicitor’s office or obtaining certified copies of identity documents. Initial forms and supporting documentation can also be completed electronically, enabling a faster and more convenient start.
Digital signatures
Digital signatures are also becoming commonplace, although stricter rules apply to deeds, particularly mortgage deeds and formal property transfers. HM Land Registry accepts certain electronically signed deeds, but only where its detailed requirements are met and the process is set up and controlled by legal practitioners.
An increasing number of lenders also permit mortgage deeds to be signed digitally under a solicitor’s supervision. This development is likely to be a game changer, improving access for people who are overseas, have mobility difficulties, want to move quickly or are simply away from home.
Mortgage lenders and marketability
Mortgage lenders remain central to market liquidity because they control access to credit. Their assessment of whether a property provides acceptable security can be restrictive: lenders are often risk-averse, while affordability pressures mean that borrowers must also satisfy demanding criteria.
Even cash buyers commonly want reassurance that a mainstream lender would be willing to lend on the property. A transaction may therefore be delayed – or prevented altogether – by a mortgage application or stringent lender requirements or even a mere suggestion that a property may not fulfil these. Some lenders are particularly inflexible, and buyers without expert guidance from a mortgage broker and solicitor may struggle to understand why their purchase is progressing more slowly than expected.
Conversions and new-build properties
Efforts to increase housing supply include bringing older buildings back into use through conversion and delivering more new-build homes. These projects are increasingly affected by stricter planning and building-control requirements. In my view, they form a specialist category in their own right, and genuine streamlining may be achievable only where experienced professionals handle them.
Tax: the cost that is hardest to predict
Tax is perhaps the greatest barrier for anyone trying to understand the true cost of moving or dealing with property. Depending on the circumstances, the relevant taxes may include:
- Stamp Duty Land Tax when buying;
- Capital Gains Tax when selling;
- Corporation Tax or Income Tax when investing; and
- Inheritance Tax when property passes on death.
Additional obligations may arise where trusts are involved, including registration with HMRC. Because the UK tax system relies heavily on self-assessment, uncertainty can arise over the amount payable and whether a relief or exemption applies. Except in the simplest of cases, specialist tax advice should be considered to avoid breaches and potentially significant financial consequences.
The value of trusted advice
Against this background, it is little wonder that individual transactions – particularly those in a long chain are vulnerable to stressful delays and additional costs. Building a strong, long-term relationship with a firm of solicitors is therefore essential. The right advisers can guide clients through not only a single transaction, but a lifetime of changing property challenges, while signposting complementary professional services when needed.