HC Deb 30 November 1987 vol 123 cc738-44

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

12.58 am
Mr. John Heddle (Mid-Staffordshire)

I am grateful to you, Mr. Deputy Speaker, for allowing me this opportunity to raise a matter which is of great concern and the cause of considerable hardship and homelessness to many of my constituents and, I suspect, to those of other hon. Members — the delays which they and their solicitors experience because of problems in Her Majesty's Land Registry. I am grateful to my hon. and learned Friend the Solicitor-General for being here to respond to the debate. I look forward to hearing his proposals for improving the current position, which in the eyes of many, and especially of those professional institutions directly connected with the sale and transfer of land and property, may be wholly unacceptable.

The House will be aware of the valuable work performed by Her Majesty's Land Registry. I was a practising surveyor for many years, so I am well aware that the Land Registration Act imposed upon the Land Registry a system of land registration and ownership that made property transfers in general, and house transfers in particular, a simpler and more efficient process.

However, all is not well. On 30 August The Sunday Times, under a banner heading Land title delays leave buyers homeless". stated: A staffing crisis at the Government's Land Registry is adding thousands of pounds to the cost of building new houses and forcing them to stand empty even though buyers are ready to move in … Solicitors do not usually recommend people to buy a new or converted property unless title deeds have have been drawn up by the Land Registry, which is taking up to 10 months to process them … Builders who have borrowed money to finance developments are faced with big interest payments because the newly-built homes are hard to sell without the deeds. The interest is then added to the cost of the property. The National House Building Council has said that delays are adding up to £3,000 to the cost of a new home. The Sunday Times cited the case of someone who had made an offer on a new flat in the south-east of England six months ago. Despite selling his property and being ready to move in, the bank providing his mortgage could not release the funds because the Croydon land registry office had not been able to process the title deeds. All 12 flats in the same development have stood empty for many months for the same reason.

In my constituency of Mid-Staffordshire, a Mr. Parkes of a firm of solicitors in Bore street, Litchfield—Messrs. Keely, Smith and Jobson—wrote to me on 21 October saying: As a solicitor in Litchfield I am constantly encountering delays at H.M. Land Registry which seriously complicate conveyancing transactions and lead to extra substantial time and expense being incurred. Examples of delay which I have encountered are too numerous to mention but one recent (and on-going) example is not untypical. I shall shorten the letter. He said: On 10 March, 1987 I completed a very simple transfer of a house from husband and wife to the husband following a divorce settlement. The title to the house was unregistered but because it was in a compulsory registration area the transaction had to be registered at the Land Registry. Registration was applied for immediately and in the acknowledgement it was stated that the application was likely to take about 25 weeks to complete—6 months. Mr. Parkes cited almost letter by letter and chapter and verse by chapter and verse the correspondence that then took place between his practice and the local office of the Land Registry. He wrote: In the meantime the property has been sold and a draft Contract submitted. However, it is quite clear that the sale cannot proceed until the problem has been solved and there is every likelihood that the sale which has been negotiated may fall through as a result of the delay. My client will then have to remarket the property—probably having missed out on the best season for selling. The client would also incur a considerable sum in abortive fees and expenses.

As the House will know, there are 16 Land Registry offices throughout England and Wales employing 7,310 loyal, permanent, qualified staff—an increase on the 7,029 personnel employed for the 12 months to March. The Land Registry, which I understand is still only partly computerised, made a trading surplus in the last financial year of £26 million. It charges home buyers between £80 and £130 for each registration, depending on the price of the property. That is why I thought it important to raise the matter on the Floor of the House tonight on behalf of my constituents.

The problem is that the Land Registry cannot invest that surplus in increasing its personnel and training its staff. The surplus has to go back to the Treasury. I understand that the Government are refusing to allow it to hire extra staff to overcome the very considerable backlog and the delay in the transfer of property.

A report by the National Audit Office earlier this year called upon the Treasury to invest some of the registry's revenue surplus in new staff, and I understand that senior officers in the Land Registry are now themselves admitting that they have little hope of being able to deal with the backlog or completing the compulsory registration programme on time unless some 1,500 additional staff are engaged. Mr. John Pryer the Chief Land Registrar, is, I believe, on record as saying this—and although I have not cleared this with him personally, it is in the national press to this effect: It is embarrassing that we make this money."— I think that it is wholly to his credit that he makes it— We are negotiating with the Treasury to spend some of it on more staff next year but they will take time to train. I am not optimistic about the short term. The people will not see any improvement for at least a year". He goes on, There is little doubt that the reasons for the inordinate delay now being experienced by members of the public and by their solicitors are due to buoyancy in the property market for which the Government in its determination to help people realise their lifelong ambition of home ownership, particularly amongst first-time buyers, should take some credit". The chief registrar has stated in his annual report to the Lord Chancellor that for some 12 months there has been a high level of activity in the property market, fuelled by a plentiful supply of money available for mortgages. This activity has resulted, in turn, in a substantial increase in the registry's workload—an increase in the volume of work approaching some 25 per cent.

There is no doubt, too, that the substantial rise in the number of applications for first registration is in part due to the continued programme of compulsory registration. It also reflects the general rise in the level of property sales throughout England and Wales. I understand that the total number of registrations this year is the same as in the record year of 1982–83, when the full impact of the Government's right-to-buy legislation was first felt. Over the past 12 months some. 51,000 applications arising directly out of the exercise by tenants of their right to buy have been received by the registry. This represents some 12 per cent. of all applications for first registrations which the registry has received.

May I draw my hon. and learned Friend's attention to a number of comments made by the chief land registrar in his current report. Firstly, on dealings in registered land, he says that once again for the sixth successive year an overall increase has been recorded, resulting during that time in the doubling of the volume of applications received to nearly 4.3 million. This year's increase of 19.3 per cent. in the work load is the second highest in the past six years.

On preliminary services, he says that during 1986–87 the number of applications for an official search, office copies and other ancillary services has increased by over 28 per cent. to a total number of transactions of 5.26 million.

In his annual report, the chief land registrar goes on to say, Although I take some encouragement from this, I must again draw attention to the fact that the provision of this service does have an adverse effect on the speed and efficiency with which other applications can be processed. On speed of working, the Chief Land Registrar says, During the year completion times have deteriorated very seriously. The rise in the volume of substantive applications has made it quite impossible for the Registry to cope as effectively as it would wish. Furthermore, the need to ensure the maintenance, the high level of service and the regard to applications for official searches and office copy entries necessitated diversion of staff away from dealing with substantive applications". By producing for the Treasury a surplus of over £26 million on an expenditure of £102 million, a return of about 27 per cent, the Land Registry is the epitome of Government cost-effectiveness, but, because of the unprecedented volume of business and the failure perhaps of the legal profession to anticipate the log jam which would arise from this level of business, the service is falling down on its obligation to provide the public with value for money. The consequence is hardship to all hon. Members' constituents and certainly to mine, leading in some cases to homelessness, as well as to loss of morale within the Land Registry. It is a situation that can be tolerated no longer.

I plead with my hon. and learned Friend, therefore, that something should be done. I wish to put two suggestions to him. First, I suggest that he urges our right hon. Friend the Chancellor of the Exchequer, to allow — in this particular and extraordinary instance and until the backlog of work has been eliminated — the Land Registry to borrow back the £26 million surplus to enable it to recruit and to train more staff.

Mr. Gerald Bowden (Dulwich)

I share my hon. Friend's concern about the delays and agree that his suggested solution offers a way out of the problem at the Land Registry. Is he aware, however, that local searches involving records kept by local authorities involve additional delays? Only this week, the Chartered Surveyor Weekly reported a case previously reported in the All England Law Reports relating to a property in my constituency. In the case of Rignall Developments Limited v. Halil, because of the impossibility of obtaining details from the local authority register, it was found that there was a defect in the title that was sold. In that case, which was heard in the chancery division, Mr. Justice Millett said: the time taken by many local authorities, particularly in London, to reply to inquiries and to deal with applications for official searches of the registers kept by them has become a scandal which threatens the proper working of the free market. His words applied directly to Southwark's failure in that respect, but I believe that they have application all over the country.

Mr. Heddle

I am grateful to my hon. Friend. Mr. Justice Millett's words are far more eloquent testimony than I could possible give in support of my case.

My second suggestion is that, with the chief registrar and his colleagues, my hon. and learned Friend should discuss with the Law Society the concept of contracting out to firms of solicitors in the areas where the district Land Registry offices are situated the more routine and mundane matters which are causing the log jam so that qualified staff at the Land Registry's regional offices can deal more expeditiously with first and subsequent registrations.

Finally, I suggest that in the longer term my hon. and learned Friend should review the whole working of the whole system to ensure that the present crisis does not recur. Professional institutions engaged in the purchase, sale and transfer of land and property might be enabled to establish machinery to work alongside the Land Registry so as to ensure its continuing integrity, cost-effectiveness and response to public demand. The Government rightly wish to ensure that people can aspire to home ownership as easily as possible. I believe, therefore, that we have a duty to ensure that that machinery runs smoothly.

1.13 am
The Solicitor-General (Sir Nicholas Lyell)

I am most grateful to my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) for raising this important issue, which is the concern of all who are engaged in conveyancing and mortgage activities. My hon. Friend's deep knowledge of the world of property is well known to the House. It is a pleasure to see with him my hon. Friend the Member for Dulwich (Mr. Bowden), who also has deep professional knowledge of these matters, and my hon. Friend the Member for Walthamstow (Mr. Summerson).

In my response to the debate, I hope to show not only that the Government recognise the substance of my hon. Friend's concerns and the circumstances giving rise to them but that the Lord Chancellor, with the consent of the Treasury, has taken and will continue to take steps to remedy the delays and to modernise and improve still further the valuable services that the Land Registry provides.

This year marks the 125th anniversary of the founding of the Land Registry and it is perhaps indicative of the well-established, well-ordered conduct of the business of the registry that its activities are so rarely discussed in this House. I particularly welcome, therefore, the opportunity to describe the factors that have brought about the present difficulties that the registry and its customers confront and the measures that the Government and the chief land registrar are taking to restore the speed of service that the conveyancing community is entitled to expect.

Development of a national land register has been supported by successive Governments, not only to provide

security of title backed by state guarantee and provision for indemnity, but to provide the machinery whereby conveyancing and other property activity can be simplified and costs reduced. Throughout this century, as compulsory registration provisions have been extended to new administrative areas, so the land register in England and Wales has developed, with more and more titles being brought on to the national register. Now, nearly 11 million titles are registered and in excess of 90 per cent. of all conveyancing transactions are handled by the department. My hon. Friend will be glad to know that under present plans, the compulsory programme will be completed by 1990.

One of the most marked developments in this country during this decade has been the growth of home ownership, and the expansion of property activity, greatly aided by the ready availability of mortgage finance. There is a continuing demand by people to buy and to improve their own homes. Not only is there a greater awareness in the private and in the business and commercial sectors that property is a unique asset and a sound investment, but the institutions and finance houses recognise, too, the investment value of mortgage portfolios. This heightened activity in property and in property finance has led to unprecedented numbers of applications being made to the Land Registry, not only in respect of searches and inquiries of the register, but for registration of new owners of land and mortgages.

Widening owner-occupation has been a central and successful feature of Government policy, most notably through the right to buy legislation under the Housing Acts, and we welcome and encourage the continued increase in home ownership and home improvement supported by a buoyant first and second mortgage market. As my hon. Friend rightly said, we are, to some extent, victims of our own success.

For the Land Registry, the continued development of private ownership and property activity has meant an exceptional growth in its commitments with a trebling of the applications received in the past 10 years, a doubling in the past five years with an increase of 25 per cent. in 1986–87 over the preceding year. In the first half of this year, applications received increased by a further 9 per cent. It is this relentless demand for registration services that has led over the past two years to an accumulation of unprocessed applications for registration and consequently to the delays that have prompted this debate.

The work of the Land Registry divides broadly into two main areas. First, precontract and precompletion applications for office copies and official searches of the register and of the public index map. The applications are time-sensitive as they are initiated by or on behalf of intending purchasers or mortgagees seeking essential information and guarantees from the registry prior to the exchange of contracts or prior to the completion of a prospective purchase or loan. These applications, some 5.2 million in 1986–87, currently account for about two thirds of all applications received by the department. They are given priority by the Chief Land Registrar so as to ensure that intended conveyances and mortgage transactions can go forward without delay. It is right to say that not only are 60 per cent. of these applications processed by the registry within its target time of 48 hours, but over 90 per cent. are completed and despatched within four days of receipt.

The second area of work handled by the department is the registration of new owners and new mortgagees following completion of conveyancing transactions. These substantive registrations account for the remaining one third of all applications received and totalled 2.6 million in 1986–87. Because of the massive growth in its work load the Land Registry has had to deploy an increasing proportion of its available manpower resource on the time-sensitive precontract and precompletion searches and office copies, leaving a reduced proportion to contain the substantive applications for registration which have also increased in number. It is to the credit of the Land Registry and its staff that it has in successive years increased the total number of applications processed and, in 1986–87, completed a record number of applications and achieved a productivity improvement of more than 3 per cent.

Over the period of five years between April 1982 and March 1987 the Land Registry secured an increase in its permanent manpower of nearly a third, but since early 1985 staffing levels had not kept pace with the rapidly rising work loads which have greatly exceeded expectations. This factor is the root cause of the present difficulties.

Under the legislation governing its activities, the Land Registry is required to raise, through fees, sufficient money to cover all its outgoings. Fees are based, for most transactions, on the value of the property. With rapidly growing intakes and the rise in property values total registry fee income has increased markedly, generating surpluses in excess of the approved expenditure limits authorised under Supply procedures. The Land Registry has sought to limit its fees and so to limit the growth in its potential total fee income with the making of two fee orders in 1985 and 1986, each of which had the effect of reducing the fee-earning capacity of the fee scales. Nevertheless, the reductions in the fee scales were more than offset by the high level of activity and the rise in property prices. As a result, significant surpluses of fee income over expenditure authorisations have been paid into the Consolidated Fund. My hon. Friend was right to make that point. It has always been the case that if the Chief Land Registrar were able more readily to direct registry fee income into additional resource in order to maintain registry services, he could ensure that arrears of uncompleted applications did not accumulate and an efficient and prompt service be maintained at all times. My hon. Friends will be pleased to hear that the Government have accepted that there may be circumstances in the case of fee-earning bodies which are self-financing, such as the Land Registry, where net control could be preferable to fixed expenditure limits provided that acceptable efficiency criteria and performance yardsticks are used to ensure value for money. Such an approach would provide for the additional revenues generated by the increased volumes of applications to pay for the staff and other resources that the Land Registry needs to maintain the output necessary, if the speed of services is to be maintained.

The Land Registry and Her Majesty's Treasury have examined alternative financing arrangements and I am also pleased to be able to state that this month my right hon. Friend the Chief Secretary to the Treasury has agreed new arrangements which will be established as from the coming financial year and which will exempt the Land Registry from gross running cost control. This will provide far greater flexibility and greater scope for the Chief Land Registrar to direct fee income toward registration services.

It is thus clear that the Land Registry must now be brought up to a strength which matches the conveyancing and mortgage business generated in England and Wales and so enable it to meet the demands made upon it. In view of the growing arrears of unprocessed work the Land Registry sought and secured in July, by way of a summer Supplementary Estimate, an increase of 500 permanent posts for the current year. The majority of these posts have now been filled with new recruits and a massive training programme is now under way. Apart from that specific increase and the underlying changes in the basis of financing to which I have already referred, I am pleased to be able to say that as part of the annual public expenditure survey an appropriate and significant increase in expenditure and manpower has been approved for 1988–89 which will enable the Department to meet its projected commitments for that year and contain, and eventually reduce, the backlog of outstanding casework

To meet the growth in its business the Land Registry is developing, as a matter of high priority, its regional structure. New offices have been opened in Telford, Coventry and Hull and are presently giving valuable assistance to the hard-pressed district registries in the south. In 1988 it is planned that each of these sub-offices takes on responsibility for its own area as a district registry in its own right. Two further offices are likely to be opened before 1990. These developments will serve to take the pressure off the most heavily burdened district registries especially those in the south where conveyancing activity has been especially high.

In September last year the Land Registry introduced computer processing at its Plymouth district registry. Under the new system registers in conventional form are computerised as transactions arise, so facilitating the processing of all subsequent transactions affecting the computerised titles. Already some 100,000 titles have been computerised and 20 per cent. of transactions affecting registered land received at Plymouth relate to these titles. Following an evaluation of the project at Plymouth approval has now been given to introduce computer operations at all district registries. Implementation is planned for the Gloucester and Swansea offices in 1988 and progressively to all other district registries over the next five years.

The Land Registry is the custodian of a valuable, unique and active record of land ownership for England and Wales and provides the essential machinery for simplifying and modernising the conveyancing process. I am confident—I am grateful to my hon. Friend for his suggestions—that with the measures that I have referred to and the continued endeavours of the Chief Land Registrar and his staff the registry will restore the levels and speed of service that it and its customers want to see.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past One o 'clock.