What the rest of the UK can learn from Scotland’s streamlined property transaction process

Landmark residential property trends report Q3 ‘24 – October 2024 originally published by Landmark Information Group

What makes the Scottish property transaction process more effective than our counterparts in England & Wales. 

 

Landmark’s Property Trends Report for Q3 2024 is now live, providing an in-depth analysis of developments in the residential sector. Richard Hepburn, Managing Director of Millar & Bryce, explores the current market trends presented in Landmark Information Groups’ Q3 property trends report.

In our latest quarterly Property Trends Report from parent company, Landmark Information Group, presenting July-September 2024 data on listings, Sold Subject to Missives, completions and registered sales, Scotland’s figures offer a valuable perspective in comparison to the rest of the UK. Completions were down just 13% in Q3 2024 vs Q3 2019 (the last ‘normal’ pre-Covid benchmark year), which contrasts sharply with England and Wales – where completion volumes were down 42% – indicating that Scotland’s streamlined transaction process working more efficiently. 

So why are property transactions more likely to be successful in Scotland?

Devolved matters; Scottish Parliament

Across the UK, the uncertainty over mortgage rates and the new Labour Government kept the brakes on the residential market. In Scotland, as land and property related matters are devolved to the Scottish Government, the implications from ongoing political unrest have had less of an impact.

Richard says, “Whilst some sellers and buyers in Scotland might have been holding off to see what beneficial changes the new UK Government will make the fact that some key levers in the property space are controlled by the Scottish Government (transaction taxes, first-time buyer incentives) means, we may not see the same profile of activity going forward.”

As prospective buyers paused ahead of the Budget in the hope of more favourable interest rates, residential listings remained high, and the presence of sub-4% interest mortgage deals started to create more seller and buyer confidence.

Continuing, Richard commented, “One other factor in the mix is the first new Labour Government Budget. Down South, there has been the sense that some buyers have held off to see if there are any property tax changes to come before acting. This might have lesser impact on us with property taxes set locally by the Scottish Government. The SDLT changes from Spring 2025 in England & Wales announced in the 30th October budget won’t impact Scottish buyers but it remains to be seen what changes the Scottish Government might announce in the 4th December Scottish budget.”

While the expected November 0.25% base rate interest rate cut to 4.75% has gone ahead, uncertainty remains with major UK lenders increasing mortgage rates and predictions that these will remain at this raised level for some time on the back of , with some measures in the October 30 budget .

Home Report

Earlier this year, Richard commented on the ‘dynamic’ of Scotland’s transaction end-to-end pipeline and market that allowed a more efficient transaction process with quicker turnaround times.

In Scotland, we have the well-established Home Report at the beginning of every listing process, mandatory under Scottish Government requirements. This also satisfies many of the up-front information requirements under the National Trading Standards Material Information rules that came into force in the Autumn of 2023. Their ask is simply to ensure that sufficient transparency is given on all ‘material information’ to prospective purchasers right at the start, avoiding them wasting time and money in considering a property that may not be suitable for them. These extend to items not typically included in the Home Report currently such as flooding, property rights (ie. access) and impact of coal mining. Flooding is a good example of a forward-looking risk which is not covered off in the current transaction process in Scotland but may in the future be impacted by the effects of climate change for example.

Richard continues: “To further compliment the current Home Report, Landmark Scotland has developed a Supplementary Report with the aims to further close the gap in satisfying the Material Information requirements, providing the additional, property specific, information needed to comply with parts B & C of the rules”.

Whilst overall we don’t have the same transaction delays as in England and Wales, with the Home Report already recognised by National Trading Standards as being pretty close to the levels of up-front transparency they require, this supplementary information completes the picture.

Q4 Insights

Richard commented, “As economic factors continuing to stabilise and Scotland’s efficiencies in home buying and selling make for a more streamlined transaction process – the outlook for Q4 and into 2025 is looking more positive. A healthy residential property market is a proven factor in improving the economy overall.”

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For more in-depth insights, check out our Q3 2024 Residential Property Trends report today.

 

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What are the Land Register and the Sasine Register?

The Land Register and the Sasine Register are the two systems for recording property ownership in Scotland. They play a vital role in the country’s property law and conveyancing processes.

 

Searches of these registers are an essential part of conveyancing, and no property transaction can safely settle without them. Property titles in Scotland fall into one of three categories:

  1. The Land Register of Scotland under the 2012 Act (2012 Act Titles)
  2. The Land Register of Scotland under the Land Registration (Scotland) Act 1979 (1979 Act Titles)
  3. The General Register of Sasines (Sasine Titles)
The General Register of Sasines holds a special place in land registration history. Established in 1617, it is the oldest national land register in the world. For over four centuries, it has been a cornerstone of Scottish property law and has evolved – sometimes naturally, other times, less so – alongside its modern counterparts to shape Scotland’s current property landscape.

 

The world’s oldest land register

The General Register of Sasines is as a testament to Scotland’s pioneering role in land registration. An act of the old Scots Parliament established it in 1617, primarily recording state documents and royal charters out of reach today by conveyancers conducting common-or-garden property searches. We do, however, have access to searchable records back to the early 1781.

While there were relatively few landowners in 1617, by 1869, more land was changing hands as Scotland – and the rest of the UK – moved from a mainly rural nation to an industrialised country. To keep up with the increase in property transactions, the register underwent significant restructuring. The 1869 reorganisation established the county-by-county approach we still see in today’s searches, streamlining the record-keeping process and creating far for more efficient searches.

Just seven years later, in 1876, a game-changing innovation arrived: search sheets. This revolutionised the tracking and identifying of ownership information, making it considerably easier to compile a property’s ownership history and simplifying the complexities of title searching.

The Sasine Register has continued to evolve for the ever-changing needs of Scotland’s property system. Its ongoing relevance in certain transactions underscores its importance in Scottish conveyancing, even as newer registration systems emerge.

Modernising the Land Register

After 1876, little changed legally for nearly a century, but land registration in other countries started using map-based approaches, and discussions in Scotland began to explore a similar approach around the turn of the century.

The Land Register of Scotland came into law at the somewhat hurried signing of the Land Registration Act 1979, in the closing days of Callaghan’s government. In doing so, the country pivoted from a deed-sorting to a map-based system, and the Act received considerable criticism for its complexities and inconsistencies. Conveyancers found holes in the legislation, which they felt favoured ease of property transfer over the security of the title.

Recognising the need for modernisation, the Scottish Parliament passed the Land Registration etc. (Scotland) Act 2012, on a mission to accelerate land registration and ultimately close the Sasine Register. The 2012 Act introduced a more streamlined registration process and addressed many of the shortcomings of its predecessor.

However, in May 2014, Scottish ministers were frustrated by the lack of progress towards closing the Sasine Register. In the 40-plus years of the Land Register, only about half of Scotland’s land mass had been registered. So ministers set an ambitious goal: register all of Scotland’s land ownership by 31st December 2024 and finally transition completely from the Sasine Register to a comprehensive Land Register.

Hobbling the process, though, are the considerable differences between the Sasine and Land Registers. The centuries-old Sasine Register is essentially a chronological list of handwritten deed entries. In contrast, the Land Register is a digital map-based system that uses Ordnance Survey data for a more accessible and visual representation of land ownership.

Several initiatives were introduced to speed up the registration process. Voluntary registration allows property owners to proactively register their land, and the Keeper-Induced Registration (KIR) programme saw Registers of Scotland place 700,000 properties on the Land Register in 2017 alone.

Perhaps the most interesting initiative is the Unlocking Sasines project , which uses spatial data to provide indicative ownership information, bridging the gap between the old Sasine system and the modern Land Register. Unlocking Sasines alone added 34.9% of Scotland’s land mass to the cadastral map, marking a crucial step towards comprehensive land registration. However the key term here is “indicative ownership” as the unlocked sasine data provides a guide to ownership but not to the extent that it can be robustly relied upon.

Mapping the future and preserving the past

Still, while the Scottish Government’s ambitious target to have all of Scotland’s land mass registered by 2024 has driven significant progress, challenges persist as the deadline looms . By May 2024, over 54% of Scotland’s land mass had been successfully registered in the Land Register, marking substantial headway towards the goal and a fundamental change in how Scotland records property ownership.

However, closing the General Register of Sasines is a monumental task fraught with complexities and intricate legal and practical considerations that impact property owners, legal professionals and government agencies. It is not just a matter of digitising some old records.

The scale of this undertaking has inevitably led to a significant backlog at Registers of Scotland (RoS). Millar & Bryce Operations Director, Gary Donaldson, highlighted the hidden consequences of this backlog in a recent blog post . The delays in processing registrations can have far-reaching effects, potentially impacting property transactions, refinancing efforts and even large-scale development projects while the application is open. This backlog underscores the importance of efficient, experienced conveyancing services to navigate these challenges.

While we move towards our digital system of comprehensive land registration, the legacy of the Sasine Register continues to shape Scotland’s property landscape. With a substantial portion of Scotland’s land still recorded in the Sasine Register, expertise in navigating this centuries-old system continues to be a valuable skill.

Many solicitors turn to specialist services for Sasine searches, recognising the nuanced understanding required to interpret these historical records accurately.

For conveyancing professionals, this period of transition demands a unique blend of historical knowledge and adaptability to new systems. As we approach the 2024 deadline, the ability to bridge the gap between these two worlds of land registration will remain a key differentiator in providing comprehensive, reliable conveyancing services.

Sources

  1. https://www.nrscotland.gov.uk/research/research-guides/research-guides-a-z/sasines
  2. https://www.lawscot.org.uk/members/journal/issues/vol-51-issue-02/in-on-the-act/
  3. https://www.genguide.co.uk/source/sasines-registers-of-land-property-scotland/
  4. https://en.wikipedia.org/wiki/Land_registration_(Scots_law)
  5. https://www.scottishlegal.com/articles/amanda-cameron-deadline-for-closure-of-worlds-oldest-land-register-nears
  6. https://www.millar-bryce.com/news/hidden-consequences-of-backlog-of-ros-open-casework/

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Climate change and the future of property: new research reveals growing industry commitment

Article originally published by Landmark Information Group.

Climate change is no longer a ‘next generation’ threat; it’s on our doorstep impacting many different aspects of our lives, not least within the property sector.

Buildings are a major contributor to greenhouse gas emissions, and the effects of climate change are posing considerable risks to property values and future habitability. It is now undeniable that our sector needs to adapt.

To understand how the property industry is starting to adapt, Landmark conducted comprehensive market research of 150 senior level employees working in estate agency, residential conveyancing, and mortgage lending across England, Scotland and Wales. Our findings have helped us gauge the growing commitment towards sustainability, and how we can help support and nurture this further.

The consensus from the industry

Our report, “Climate change in the property sector: a cross-market perspective,” takes a thorough dive into the findings:

Growing concern

Climate change is no longer a distant threat. A significant majority of property professionals (72%) recognise the urgent need to address its impacts. This growing awareness is driving a shift towards sustainable practices within the industry.

Client awareness

Property professionals said that clients are increasingly concerned about the potential effects of climate change on their property purchases. Flooding (60%), energy efficiency (58%), and local planning (56%) are among the top priorities for homebuyers. As climate risks become more apparent, these concerns are influencing decision-making processes.

Shifting practices

The property industry is adapting to the changing climate, and more professionals are actively advising clients. For example, mortgage lenders are, on average, advising 48% of their clients on potential climate change risks to their property, a similar number can also be seen from estate agents (49%).

Room for improvement

While the industry is making progress, there is still room for improvement. Less than 60% of conveyancing firms are currently on track to meet carbon emission targets. This highlights the need for continued efforts to reduce the industry’s environmental impact.

Encouragingly, more businesses have created net zero strategies (76%, up from 52% in 2023). Conveyancers have made significant progress, with 48% having published their own strategies. This is a demonstrable sign at just how much positive momentum towards solutions the industry is taking when it comes to the fight against climate change.

Download our report

To gain a deeper understanding of the trends and insights from our research, download your copy of ‘Climate change in the property sector: a cross-market perspective‘ here;

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