The ‘holy grail’ of fully digital property transactions

The ‘holy grail’ of fully digital property transactions

In an article published in Today’s Conveyancer earlier this year, I stressed the importance of being forward-looking as the digital age advances around us. Less than three months later, we have had the announcement of a ground-breaking, brand-new digital synchronised settlement prototype which should help bring the Holy Grail of digital property transactions a step closer.

The prototype is the result of collaboration between the Bank of England, HM Land Registry, Bank of International Settlements, and Coadjute as part of Project Meridian which proposes to reshape the way property payments are conducted, benefiting consumers, businesses, HMLR, and the wider property market.

The term “meridian” is defined in geography and geodesy as being the locus connecting points of equal longitude. The significance of that term is therefore not lost on anyone who has ever been involved in a conveyancing transaction where it often seems that the various points in the journey are anything but a direct line from A to Z.

The Meridian prototype allows two of the most important connecting points in a conveyancing transaction (namely the transfer of funds and title registration) to be more efficiently connected for the benefit of consumers, lenders, and title registration authorities.

I suspect the next connecting point will be with HM Revenue & Customs – it already being the case in Scotland that the registration authority (Registers of Scotland) collects Land and Buildings Transaction Tax (the Scottish equivalent of SDLT) on behalf of Revenue Scotland during the registration of title process.

Not that long ago, contactless and mobile payments were the stuff of pipe dreams, and many believed that they would never catch on. How wrong they were. The potential for fraud remains, but steps can be taken to mitigate that risk.

Project Meridian digitises an otherwise clunky and complicated workflow between commercial lenders, the Bank of England, and HM Land Registry. Conveyancers will therefore be able to connect to the service and send instructions to reserve funds which will be synchronised according to a pre-arranged date and time. When that date and time arrive, the funds will be moved immediately, and digital deeds issued, with instructions sent to HM Land Registry to update the register.

The essential simplicity – and beauty – of the new digital synchronised settlement prototype is that it is not proprietary to any one body nor is it a “plug-in” of a system which has been developed in a foreign jurisdiction. On the contrary, this prototype is “homegrown” and is designed to be an open pathway along which all can travel.

In my opinion, it is essential that such platforms and services should be open and interoperable thus stimulating innovation, competition, and choice. This is a perfect example of effective collaboration between private and public entities and describes how this new approach has the potential to truly transform how a property transaction is settled.

As someone who has lobbied for a long time for such transformation to take place – and having absolutely no idea how it could have been achieved in practice – I extend my congratulations to all those involved and look forward to learning of more such innovative developments.

Article written Professor Stewart Brymer of the University of Dundee and the Scottish Conveyancers Forum. He is a participant in the Home Buying & Selling Group – https://homebuyingandsellinggroup.co.uk/

The views expressed in this article are the personal views of the author.

Stewart Brymer

Professor Stewart Brymer - University of Dundee & Scottish Conveyancers Forum. He is a participant in the Home Buying & Selling Group – https://homebuyingandsellinggroup.co.uk/

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