The government announced in the Autumn Statement on 23 November 2016 that the Land Registry will remain in the public sector. Plans for privatisation have been dropped.
The Autumn Statement last week was noticeable for what it did not contain in terms of changes to taxes relating to property. Rumours about a reduction in the rate of Stamp Duty Land Tax, or the abolition of the 3% surcharge on second homes, turned out to be just that - rumours.
But there was some good news for the property industry. The Chancellor announced that the privatisation of the Land Registry that had been proposed will not be happening. The full text of the announcement read:
'Following consultation the government has decided that HM Land Registry should focus on becoming a more digital data-driven registration business, and to do this will remain in the public sector. Modernisation will maximise the value of HM Land Registry to the economy, and should be completed without a need for significant Exchequer investment.'
As we reported in our article earlier this year Consultation on moving Land Registry operations to the private sector (31 March 2016), the government had proposed (as its preferred option) contracting for the continued operation of the Land Registry with a private sector operator. The register would remain in the government's ownership, but the Land Registry's employees and its assets would be transferred to the new operator in exchange for a capital payment to the government. A service contract would set out the arrangements between the operator and the government.
This change of view is welcome, although not entirely unexpected. Responses to the consultation earlier in the year had been universally unfavourable, with practitioners and trade organisations concerned that the Land Registry would be starved of investment and the collective experience of its skilled staff would be lost.
The Law Society President Jonathan Smithers said, 'Whatever the political and ideological debates around privatisation, the Land Registry is not a commercial operation which can be easily privatised. Placing it in private hands presents unique challenges and risks, which would have to be addressed should any form of sale proceed.'
Furthermore, there had been an expectation that provisions authorising the part-privatisation would be contained in the Neighbourhood Planning and Infrastructure Bill. However, when this was published recently, it contained no mention of the Land Registry's future.
Interestingly, the Chancellor's statement emphasised 'a more digital data-driven registration business'. The Land Registry has already announced that it is working on a trial of a Digital Mortgage Service. Perhaps some form of electronic conveyancing system may once again be under consideration.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.