HM Land Registry continue to grapple with an ‘alarming’ number of requisitions despite efforts to improve the quality of data submitted to the agency. The number of requisitions sent to conveyancers varied from 2.9 per 100 applications to 237 according to analysis of the publicly available data.
Technology consultancy Novus Strategy took an average for the 10 residential conveyancers with the largest and lowest proportion of requests linked to register updates over the last 12 months to arrive at the numbers; with the worst offending firms averaging 83 times the best.
The number of requisitions raised by HM Land Registry averages 11.7 per 100 applications across all businesses filing register updates, including conveyancers. Novus acknowledges conveyancers will not be at fault for all the requisitions, which can be raised in error, or cases where third-parties may have failed to provide them the right information in time. HMLR can also request more information under rule 17 of the Land Registration Rules 2003.
Of 5,742 organisations of all kinds submitting update applications, 135 firms (2.4%) received more requests for information than they sent applications. Meanwhile, 393 organisations (6.8%) received no requests for information at all, though this will include many cases where no property changed hands, for example remortgages.
“While the particular circumstances of these transactions and the exact mix of conveyancing business attended to by these firms are unknown, this clearly illustrates the scale of the opportunity that presents itself. The cost and duration of transactions can and should be slashed by the amount of innovation we see moving into the homebuying industry at the moment. That’s very welcome after years of slow progress caused by an absence of interoperability.”
said Chris Williams, founder of Novus Strategy, adding the range of conveyancing work firms carry out will vary but the findings illustrate the extent of the efficiency challenges the industry is currently trying to solve.
HMLR themselves are also working on ways to reduce requisitions; announcing in March it would be introducing enhanced submission verification to reduce requisitions with checks including ensuring the Charge date is in the present and not a date in the future, and highlighting omissions of applicant and borrower names, confirmation of Declaration of trust, and title number errors preventing their submission and reducing later queries.
Williams says such initiatives come ‘amid a wider technological push towards interoperability’ across home buying that he says will deliver efficiencies that should drastically reduce Land Registry requests.
“This shift is what’s become known as Horizontal Digital Integration (HDI) a framework developed by Novus Strategy that embodies the move from purely internal digitisation to a world where open networks and data standards unlock transparency and information sharing across all businesses involved in a transaction.”
Requisitions can delay registrations by as much as three weeks and costs the conveyancing sector £19.1m every year HMLR said last year. He points to identity as one area of significant impact, with HMLR revealing recently that identity and name variations were responsible for 195,000 avoidable requests each year. The institution has also said is will accept Qualified Electronic Signatures (QES) and is encouraging conveyancers to start submitting applications signed using the digital tool straight away.
“…while these figures are quite alarming, transformation is on the horizon now thanks to the adoption of HDI strategies, where these sorts of queries should largely evaporate if the sector can create seamless data handoffs in the property transaction process. A level of digital maturity has been reached across the home buying and selling ecosystem, and we’re seeing lots of innovations coming forward, not least Land Registry’s own digital registration service and its move to accept qualified electronic signatures.
“It means shared verifications, permissions, open networks and common data standards will consign manual rekeying of information and endless delays to history, with higher margins, scalable capacity and a better customer experience to boot.”
concludes Williams explaining delays damage the efficiency, cash flow and profitability of everyone involved in a transaction. For lender longer pipeline-to-completion times tie up capital which isn’t producing a return. Cost of funds comes under pressure because unpredictable capital requirements make it harder to plan for the arbitrage between wholesale drawdown and the pricing of rates on savings products. Delays also raise the risk of fall-throughs which exacerbate these problems and weigh on net interest margins. When interest rates are rising, consumers can be left counting the cost too as offers expire and borrowing becomes more expensive.
