For a number of years now, HM Land Registry (Land Registry) has been one of the most innovative and forward-thinking government bodies, driving forward change in how ownership is registered and mortgage deeds signed.
The non-ministerial government department, founded in 1862, registers the ownership of land and property in England and Wales and reports to the Department for Business, Energy and Industrial Strategy.
To cater towards the fast-changing nature of the mortgage market, with more and more people finding mortgage offers online, and some lenders introducing online application services, Land Registry created a new digital mortgage service
The ‘Sign your mortgage deed’ service is described as ‘an innovative yet simple way’ for a lender and conveyancer to create a digital mortgage deed that can be signed by a borrower online.
This, it says, saves time by removing the need for paper mortgage deeds that need to be signed in front of a witness and returned by post, while also reducing the risk of errors on the form. This, in turn, removes the need to resend and resign forms.
The whole process, as a result, becomes much simple and much quicker, with some customers also suggesting to Land Registry that it is more secure than the paper process. Since April 2018, when the Land Registry registered the first digital mortgage on a property in Rotherhithe, east London, more and more conveyancers and mortgage lenders have utilised the service.
In February 2020, it was revealed that the ‘Sign your mortgage deed’ service had registered its 7,000th deed, just four months after the 1,000th deed was registered. Land Registry said many of the country’s largest mortgage lenders are using the service daily, with more and more deeds being created every week, while leading conveyancing companies have also joined ‘the digital mortgage revolution’.
By volume, the top three lenders using the service are HSBC, Santander and Nationwide, while the top three conveyancers are LMS, Enact and Optima. The three top combinations are LMS-Santander, LMS-HSBC and Optima-HSBC.
Why is the system deemed better?
The digital service was launched to reduce paperwork and delays when applying for a remortgage. As a result, some customers have been able to complete the remortgage process in just three days, 18 days less than average for a paper transaction.
The only information required is an email address, a mobile phone number and the borrower’s date of birth, with the need for witnesses and physical paperwork eliminated.
As the whole process is carried out online, it can be done at any time of the day and anywhere with an internet connection, which means the service isn’t delayed by people waiting until they get home, needing to buy stamps, or making the last post.
The service is currently available for people remortgaging their houses, but Land Registry plans on expanding the service to all homeowners in the future.
Who is using it?
The lenders actively using the digital mortgage service, according to the latest Land Registry data, are Barclays, Coventry Building Society, HSBC, Nationwide and The Mortgage Works, Principality Building Society, RBS and NatWest, Santander and TSB.
Meanwhile, the conveyancers using the service are Enact, Hugh James, LMS, O’Neill Patient, Optima, QCAS (Shulmans) and Solex (via LMS). Customers with the mortgage lenders listed above are advised to talk to their conveyancer about using the ‘free and fast new service’.
Land Registry is working with other mortgage lenders and conveyancers to help them get ready to use the new service, while the service has been shaped with the extensive support and feedback from Coventry Building Society and Enact Conveyancing during the initial development phase.
How does it work?
The ‘simple and free’ services enables homeowners to sign their mortgage deeds online. For this to happen, the lender creates a digital mortgage deed template with Land Registry. The conveyancer then uses the template to create the deed and sends the link to the borrower.
To sign their deed, the borrower uses GOV.UK Verify to confirm their identity, providing an additional level of identity assurance that does not exist when signing a paper deed.
Once their identity has been verified, they are logged into the Land Registry service and can check the mortgage deed. Once happy, they request a code to ‘sign’ their deed, which is automatically sent to the mobile phone number they gave to their conveyancers. Once they input the code, the mortgage deed has been signed.
The digital mortgage service forms one part of Land Registry’s wider digital transformation plans, to make buying, renting, selling, financing, building and managing property easier and quicker. This includes the Local Land Charges Register and the Digital Street research and development project, now in its third year, which is designed to drive innovation with the aim of making buying and selling property simpler, quicker and cheaper.
As part of this, it is exploring various PropTech solutions – including use of the blockchain – and engaging with key stakeholders, including PropTech specialists, data experts, conveyancers, property developers, mortgage lenders and others.
