How will professional valuers respond to changes in the land registration system?

The undoubtedly valuable work of creating a land and property information hub for Scotland may be an “exciting development”, as Keeper of the Registers Sheenagh Adams has described it, but it is certainly not a fast-moving one.

The online system will eventually allow users to find out comprehensive information about any piece of land or property in Scotland with a single enquiry, including school catchment areas, mining reports, invasive species, flood risks and crime statistics. The hub will also include statistics that people need when making property decisions.

The changes are being made in the Land Registration Scotland Act 2012, which came into force in December 2014. The intention is that all properties on the Land Register must be shown on a map and cannot overlap with one another.

However, most land and property in Scotland is rural. While 58% of property is now on the Register, that accounts for only 28% of the land mass. This means that 72% of land still has to be registered.

The uptake among property and landowners has been only slightly more than glacial, and the Keeper has tried to encourage a more proactive voluntary registration by offering a 25% reduction in the not-insignificant registration fees.

And costs are certainly a major issue. Though the Keeper may be reducing fees, the time spent by professional services firms such as DM Hall Property Search, in title examination and mapping is a consideration.

Large public sector organisations, for instance, face a mammoth task in trawling through dusty old documents, with consequent professional costs and man hours, to help co-ordinate the myriad of title plans.

The relevant question for Chartered Surveyors is how the profession will react to this new source of information as it gradually evolves and what it means for valuation practice in future and, importantly, market sentiment.

As a consequence of the processes currently under way, the changes in the amount type and quality of information will become apparent only as time goes by, and the responses from Surveyors are likely to be subject to subtle alteration.

However, the balance of probabilities is that market places, and the professionals who reflect those markets, will incline naturally to a title which is in modern format, crystal clear in terms of its definitions and delineations and verified by the authority of the Keeper. A title where rights of access or rights to private water supplies and drainage outlets are put beyond all doubt, where boundaries follow fence lines, and accesses clearly abut public highways.

The analogy is that of a car buyer who, faced with a choice of two identical models, chooses the one which has complete records, maintenance logs and documentation, over the car which is backed by assurances from a motor engineer.

And, as surveying practices have adapted by responding to other readily available information on issues such as planning and development potential, flood risk, radon gas risk, nitrate vulnerable zones, sites of special scientific interest, so too has the market.

There is likely to be a subtle shift towards the recognition of value in a title registered under the new digital system, in that it puts beyond doubt any potential areas which might be subject to challenge. Clearly, as at present, if there is the potential for challenge, value can be reduced significantly.

The corollary is that, if the market evolves in the direction of a preference for better information, agents are likely to factor into their advice to clients that they should ensure that their title is up to date, before marketing, to ensure speedy transactions and liquidity in their sale. This is not just for protection of value, and saleability, though. DM Hall Property Search has already unearthed rights from these dusty old files such as unknown access, mineral rights and even potential development plots.

The Keeper and her team have embarked on an arduous task, and are facing an uphill struggle in trying to encourage land registration, largely on grounds of cost and understandable inertia.

But if the new system begins to demonstrate that it facilitates ease of tradability and ease of sale, perhaps they will begin to find that it becomes its own best advertisement.

Gordon King, BSc FRICS, leads DM Hall’s rural specialist department Baird Lumsden and is a rural valuer who for many years sat on the RICS Rural Professional Group in Edinburgh and, latterly, in London. Today he sits on the RICS UK Valuation Professional Group.

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2018-12-18T10:48:23+00:00