The start of a new decade is often a period of reflection and speculation. The Council for Licensed Conveyancers (CLC) have done just that in their speculative discussion paper - ‘Conveyancing 2030’.
The CLC looked back to the dawn of the last decade which was littered with reduced confidence, poor transaction levels following the financial crash and arduous tasks through time consuming data collection involved in the compilation of the soon to be abandoned Home Information Packs (HIPs).
As the sector was rebuilding, technology was evolving. Apple’s launch of the inaugural iPad forced the tech sector to adjust, reshape and readjust to the way consumers live. The decade that followed has witnessed a legal sector scrambling to ensure it offers legal services in a way which best represents the modern consumer- technology driven and increasing online. Investment in Legal Tech start ups almost tripled between 2017’s £22 million and the £61 million invested in 2018, according to the most recent data set compiled in the ‘Legaltech Startup Report 2019’.
As the decade ended, around a third of conveyancing firms were embracing portal technology solutions to improve the home buying and selling process and more firms were beginning to incorporate conveyancing automation into their business processes and legal services, the CLC envision a future property sector driven by Smart data compilation, fully electronic conveyancing and a drastically altered role of the legal professional.
In this article we will look at some of the key issues, consider where we are in the present and consider if the sector will catch up with the predictions within ten years.
The CLC’s vision predicts a very different home buying and selling process. One that uses shared data and information to enable a buyer to state an interest with an estate agent, pay a small holding deposit and agree a short 60 to 90-day completion date all at the same time. Holistic data sources will then talk to each other to ensure banking, lending and legal issues become seamless and integrated.
The CLC highlight the fact that this system already exists and works extremely well. They cite Australia’s continent-wide use of the e-conveyancing Property Exchange Australia (PEXA) system which offers a blanket policy use of e-conveyancing and uses an online secure workspace to ensure all key stakeholders have a place to share information.
(As a company with offices in both Australia and the UK there are many pros of their system but also cons which we’ll cover in another article.)
All property related documents are made in the workspace and signed and lodged online. Conveyancers confirm details with the buyer’s bank, complete title searches, transfer funds, pay all disbursements and complete land registry registrations all within the same system.
Registering land and digitising information will be crucial if a holistically shared dataset is going to succeed. Despite attempts to ensure registered land has increased from 50 per cent to 84 per cent since 2005, the final 14 per cent of unregistered land has proven difficult to find.
HM Land Registry (HMLR) are committed to achieve ‘comprehensive registration’ of UK land by 2030. This will mean that land unlikely to be sold or change hands, in addition to other unregistered land, such as national road and rail networks will be uncovered, recognised and registered by the end of the decade.
Alongside issues of comprehensive registration of land, HMLR is also tasked with digitising current local authority data which still contains thousands of paper records. Of the 316 local authorities, only nine digital migrations have taken place and joined the Local Land Charges (LLC) programme since the District of Watford first digitised in the summer of 2018. 22 local authorities were preparing to upgrade their systems and nine were in pre-flight at the end of 2019.
Whilst HMLR has targeted for 60 local authorities to enter pre-migration by the end of 2020, they have estimated that full migration could take 18 years based on the current rates. With such a huge chunk of land unaccounted for and delays in digital migrations, the aim of creating a shared useable data set by the end of the decade may be come up against difficulties.
However, some processes are already digitised and are quickly becoming an accepted norm amongst conveyancers and lenders. In February, the 7,000th mortgage deed was registered, rising from 1,000 at the end of 2019. Given the increase in digital remortgages being registered in recent months, HMLR has speculated that this figure will surpass the 8,000 mark by the end of March.
The Home Buying and Selling Group, made up of key stakeholders in the property sector, is committed to finding ways of coordinating data sets in order to deliver a ‘single source of truth,’ on every property. They hope that smart technology will enable any property changes to automatically update the Buying and Selling Property Information (BASPI), enabling the buyer to have the full property picture before making a transaction.
The CLC highlight the Geospacial Commission which promotes shared learning and information amongst core partners including Ordnance Survey and HMLR. If stakeholders embrace this single data source, then the Home Buying and Selling Group claim that each physical home will have a digital twin with up to date information in the form of a digital logbook. Unlike HIPs, these data logs will update and remain with the home throughout its sales history as opposed to replicated data being sourced in the previous iteration. Financial services, through Open Banking and Third Party Managed Accounts are also creating a safer transaction process and could be integrated into a single system in the future
These potential changes to the way data is harvested, stored, shared and used will change the role of conveyancers. Machine Learning through AI working alongside secure blockchains or shared data areas could eradicate the need to perform administrative tasks, freeing up the legal professional to provide bespoke advice. The conveyancer will need to interpret the information garnered through the process and help the buyer gain a level of understanding.
The CLC also speculate that technological communication methods will become more prevalent in the future. This can already be seen in the present. More firms employ chatbots for information and onboarding means; this could develop into legal service communication by the end of the decade.
The importance of data is clear in the future of the sector with consumers looking for instant information results. There is so much more we could write about in this article and we surely will over time.
All sectors will ultimately have to change and its great to see a regulator leading the charge and we fully applaud the reports ambitions and aims.