Title fraud is a very real issue for lenders – the moment when a mortgage goes into arrears is often when fraudulent activity on a title is revealed. The proposed privatisation of the Land Registry, announced by the government in the Autumn Statement last year, should consequently be of concern to lenders as many experts have argued that it increases the potential for fraud and manipulation of the data held at the registry.

The Open Data Institute (ODI), set up in 2012 to promote transparency and the accessibility of open data, has been very vocal in its criticism of the proposal. The ODI argues that if it were to go ahead it would mean that the data it stores would no longer be freely available. In addition, as Jeni Tennison, technical director and deputy director of the ODI, explained to the FT, it also has concerns “around what happens to the data that the Land Registry holds if it shifts from something we get for free to something we have to pay for.”

Of particular concern, according to Tennison, is the potential for fraud: “Can we trust the people maintaining that data not to change it?”

Property title fraud costs the Land Registry millions of pounds each year.

In 2015, a Freedom of Information Act request submitted by Titlesolv revealed that a total of £23.3m worth of claims were received by the Land Registry in 2014, with almost £10m paid out in compensation.

The potential for privatisation to have longer-term implications on the economy and corruption in general has been picked up on by number of critics of the proposal. In its draft response to the government’s consultation, the ODI notes that introducing a profit model would mean that the potential owner of the Registry would be forced to “maximise their own return rather than consider the impact on the economy as a whole.”

Furthermore, in a seminar on land and corruption held by the UK Land Forum, Geoffrey Payne, international advisor to the World Bank, stated that publicly-owned land registers were vital to ensuring “community trust and social stability”, and that they were needed to fight corruption in developing counties particularly.

One of the most vocal opponents of privatisation of the Registry is former Chief Land Registrar, John Manthorpe, who in an article in The Guardian, described the government’s proposal as “misguided”. He went on to say that that: “Across the world, a trusted system of land registration is central to social stability and economic success.”

The closing date for responses to the consultation is 26 May.

While the outcome of this latest attempt at privatisation is as yet unclear, the risk of fraudulent dealings with title can be managed using title insurance products provided by Titlesolv.

Attributed to Chris Taylor, Chief Executive Officer of Titlesolv 

Titlesolv is the trading name of London & European Title Insurance Services Ltd authorised and regulated by the Financial Conduct Authority.