Land Registry Delays Affect Property Sector

Have you or any of your clients been affected by delays when using the Land Registry?

We know we’re not the only ones! The backlog of applications at the Land Registry is now having a huge impact on activity within the property sector as a whole.

Recent examples we’ve experienced are:

Delays in lease registration that form part of a legal auction pack – which leads to borrowers missing auction deadlines.

Delays in registering title splits on new developments – meaning our clients were unable to raise finance against their site, causing a halt to undergoing new projects.

The impact of the delays

The other impacts of delays in the Land Registry, also known as the ‘registration gap’, include:

• Putting any sale or transaction at risk of not going through
• Delayed mortgage refinancing, incurring potential penalties and increases in interest rates on overdue loans
• Landlords not being able to serve legal notices or grant leases, because they have not yet been registered as the owner of the purchased property
• Developers, as well as not being able to raise finance against their new site, will also struggle to sell new units or housing
• Delays in applications are also affecting probate and delaying inheritance – though, with some lenders, clients can proceed if they can prove a clear line of succession

You can view all the updated timescales for Land Registry applications here. You’re looking at 4-6 weeks for a new mortgage or change in ownership, or around at 8-12 months for registering purchases of plots on new developments.

With staff at the Land Registry going on strike this month, the issue may get worse before it gets better.

Can anything be done to speed this up?

In a bid to increase efficiency, the Land Registry launched its digital registration service in April 2021, with the option to complete full applications available from November 2022 (you can read more about the details of the digitalisation here).

Whilst some of these changes are still in their infancy, there doesn’t appear to be a significant improvement in waiting times as it stands.

Another option is to expedite an application to fast-track a response. This involves including supporting evidence along with your application, such as a mortgage statement documenting the charges and rate increases, or for a developer, statistical material showing how the delay is having an impact on sales.

Even with the expedited option, there is no guarantee of applications getting processed quicker, as there still needs to be timely liaisons with all working parties to ensure an efficient turnaround.

And if I can’t expedite?

For the most straightforward transactions and refinancing options, registration is often just a ‘formality’. There is, however, always the option that the Land Registry could deem the application as ‘defective’. These complications can often be remedied, though there are more serious, potentially fraudulent, implications further down the line you want to steer clear of.

Under the advisement of a legal expert, you may wish to continue (for a straightforward transaction) without registration, looking at the following factors:

• Examining the original copy transfer and/or lease
• Having a more detailed look at the existing title
• Cross-checking stamp duty land tax – if relevant
• Legally verifying the identity of the seller – using their solicitor
• Checking for undisclosed insolvency or bankruptcy
• Ensuring the correct signage on all attached plans
• Checking that the borrower or purchaser has given consent on the existing title
• Checking the need to discharge any outstanding loans
• Ensuring the application is marked as a priority

How we can help

As you can see, the art of navigating through Land Registry delays is very much a plate-spinning exercise involving due diligence, well-packaged applications, and timely communication throughout.

Thankfully, this is exactly what we specialise in at Pure Property Finance. Call us on 02920 766 565 or request a call back here.