Depending on what you read, or who you believe, the future could see us living on the moon, in floating cities, or even in subterranean caverns.
Whatever your fancy, what is clear is that technology will play an ever increasing role in our lives in the future, and the mortgage sector is no exception.
Over the last few years, we have seen the steady progress of technology in almost every aspect of the property process.
Fuelled by the digital revolution that is the internet, initiatives such as point-of-sale offers have become commonplace; reducing the time taken for mortgages offers from weeks to minutes.
That said, there are still some sectors that have a reputation for being more than a little Dickensian in their business practices. One case in point is conveyancing.
While some of my industry colleagues may seem to still use quill and parchment, to be fair to them, grasping the technological nettle has been hampered by the government agencies involved in the house buying industry and their antiquated systems.
Chief protagonist is arguably the Land Registry. Now this was all was supposed to change several years ago when the government announced the biggest reform of the Land Registry – and by association the conveyancing industry – since the ballpoint pen: e-conveyancing.
The quest for e-conveyancing
The quest for e-conveyancing began almost 10 years ago, when the Law Commission and Land Registry set out joint proposals entitled ‘Land Registration for the 21st Century’.
This was followed by law in the Land Reform Act of 2002 and the promise of a fully digitalised property transaction within a few short years. According to the Land Registry itself, the goal with e-conveyancing is to make ‘conveyancing easier for all’.
The vision from Whitehall is for the UK to have a world-class conveyancing service that facilitates the propensity to purchase that we have in this country.
Key elements of the proposed e-conveyancing service include the introduction of a Chain Matrix, intended to provide transparency throughout the property transaction chain, meaning all parties involved can see exactly what stage each link is at in terms of completion.
Electronic signatures will also become a central part of the purchase process, allowing solicitors and clients the ability to process documents digitally. There will also be an electronic funds transfer system established to handle all the financial aspects of transactions. The aim behind these e-conveyancing measures is to make the conveyancing aspect of house buying as easy and pain-free as possible.
Causing consternation
Now conveyancing is hardly the dark arts, but it does still cause consternation for many of those who need to get involved with it. Impenetrable, interminably bureaucratic and overly time-consuming are some of the many charming phrases I have heard associated with the practice.
But will technology bring with it the speed and transparency that is hoped?
Let us not forget, the path to true e-conveyancing is not an easy one and realising this particular dream will require a series of technological and regulatory advances.
For electronic funds transfer, a massive clearing bank capable of handling all finances involved in the UK property market would be needed; electronic signatures will require a change in the law to allow solicitors to sign documents digitally on their client’s behalf, as well as change of mindset among clients that they are not the quick route to identity fraud.
Against this backdrop of fear, confusion and technological challenges, the Land Registry has set out a five-stage implementation programme for e-conveyancing. The first phase began last year, with the Chain Matrix pilot in Portsmouth and Bristol.
The Chain Matrix is designed to provide transparency in what can be one of the most precarious elements of a house buying process. Placing faith, and thousands of pounds, at the whim of strangers understandably makes many clients uncomfortable.
With some chains having transaction links into double figures, finding out if one party far up or down the chain has had cold feet can be as hard to discover as it is annoying.
Under the Chain Matrix system, every chain will have its own progress report on the Land Registry website and indicators will illustrate what stage of the transaction each party is at.
Problems can be more easily spotted and alleviated or in the worst circumstances, if one party pulls out, everyone will know straight away. At its inception, the Land Registry stated that a UK-wide system would be available by Spring 2008, but updates on the pilots have been scarce, and whether the system is still to be rolled out next year remains unclear.
Next stage
The next stage of activity, which was originally slated for Autumn, was to present a secondary raft of legislation to the original 2002 statute, to enable solicitors to sign documents electronically on behalf of clients – constituting billions of pounds a year.
Putting the legislation to one side, the idea is currently being piloted and could become a reality in three years, although there is still work to be done to iron out any issues around fraud.
As far as electronic funds transfer is concerned, the Land Registry will need to find a centralised banker who is able to act as a clearing bank for all finances involved in the housing transaction. No mean feat in the current climate, but an essential part of the process and one we can reasonably expect to be in place within the next four years.
With all this in place, the reality of e-conveyancing could see simultaneous registration and completion by 2010. Along with other politically driven initiatives including Home Information Packs and the National Land Information Service, the traditionally time-consuming aspects of the conveyancing process are being given a technology makeover.
Judging success
Perhaps a good yardstick for the success of the implementation of e-conveyancing is another technological project the Land Registry has been working on. Since 2004, details of over 18 million properties have been available online through a website – landregistryonline.gov.uk.
For a small fee, one can peruse the boundary plans and ownership details of wide array of properties, foregoing the paper-based system of old. While another good idea in practice, media reports earlier this year raised concerns about the security of the service.
A wealth of information can be purchased for about the price of a couple of pints, which, in the wrong hands could lead to identity fraud. The response from the Land Registry suggested more emphasis had been placed on the painstaking process of scanning and uploading documents than potential for fraud.
That said, we must remember that this is wholesale change, the like of which has never been seen before in the mortgage sector. A little bit of trial and error may be tolerated if, in the medium term, a robust, secure system is established.
The question that should be asked is not what the nature and effectiveness of an e-conveyancing system may look like in the future, but is this part of a bigger agenda from government?
Not to sound like a conspiracy theorist, the fact does remain that why, despite the challenges to the raft of recent measures, does the government remain set on e-conveyancing in this form?
The changes will see the Land Registry transform from a staid, reactive bastion of property details, to a dynamic, multi-faceted driving force for change. With these new powers will also come a great deal of control as the newly invigorated body will be central to the house buying process.
It is only a small leap from facilitator to controller and it is entirely possible that e-conveyancing is the first step towards a government controlled property system. Solicitors could be replaced with European-style notaries, whose prime responsibility is the property, rather than the purchasers.
The move would allow the government to assert nanny state control of the housing market under the guise of a white knight coming to rescue anguished consumers at the mercy of beastly conveyancers.
Some say, the future is what you make of it. I say, watch this space.
