Blockchain, a technology that facilitates efficient sharing of data, is being hailed as the next technological revolution, and it is suggested that this ‘disruptive technology’ may impact upon our lives to the same extent as the internet. Many see Blockchain as an alternative technology infrastructure that can be used in conveyancing and land registration, thereby reducing transactional costs and improving speed.
HM Land Registry has recently partnered with software companies to explore how Blockchain technology could be used to provide quicker and simpler services. Other EU states, most notably Sweden, have already started to test the use of Blockchain with their equivalent national land registry and many developing countries are hoping to use Blockchain to avoid fraudulent property transactions.
Is the property market ready for it?
Notwithstanding the benefits that Blockchain may bring, most notably the possibility of increased speed and security of transactions, it is important to acknowledge that it may not be the panacea that tech evangelists suggest. Beyond its use in crypto currencies, it is as yet operationally unproven for conveyancing. It can be cumbersome and there may be a reluctance from parties who have a vested interest in maintaining the status quo and who have heavily invested in legacy systems to adopt new processes. HM Land Registry has taken a significant step forward but other stakeholders, including lenders, local authorities and conveyancers may not be quite as eager at adoption because they have many disparate systems that will need to be integrated.
A relatively straightforward transfer of interest in property, which is already registered and has no significant charges or covenant’s is well suited to Blockchain, but Land Law in England dates back a thousand years with nearly 15% of land still unregistered and many properties with complicated titles and historic obligations that require expert human input to interpret. More importantly is ensuring that all major stakeholders are part of the Blockchain, otherwise the platform will simply introduce another hurdle in the conveyancing process.
Can Blockchain be trusted?
Underlying all conveyancing transactions is the risk of money laundering and it awaits to be seen if Blockchain can be as trustworthy as is claimed. Lenders have invested heavily in their own internet based portals and other government bodies may not have the funds available to wholeheartedly implement the technology. Will other financial institutions, who represent the main interest groups and have huge lobbying power, be willing to open their systems and share data with third parties?