New data has revealed property title fraud is costing the Land Registry millions every year…
The value of indemnity claims received since 2012 have risen significantly, it has emerged.
According to the data nearly £10m worth of compensation claims have been received by the Land Registry in the last year alone due to fraud or forgery.
The data, which was gained via a Freedom of Information request by title insurance provider Titlesolv, revealed a total of £23.3m worth of claims were received in 2012. Overall, since the start of 2012 the Land Registry Indemnity Fund has received more than £59m in claims and paid out more than £31m against them.
Additionally, in 2012 the number of claims lodged equalled 78 per cent. Last year this figure rose to more than 86 per cent. However, the data also showed the actual proportion of the value of claims granted dropped considerably over the same period. This reduced from an average of 80 per cent in 2012 to just under 36 per cent in 2014.
The Land Registry is responsible for checking claims to a property when a title is registered. Mortgage lenders use these records as the criteria for approving mortgage applications and to ensure no criminal activity has occurred.
While the Land Registry has made significant progress the number of claims still remains high. Reducing this figure is imperative.
Chief Executive of Titlesolv Chris Taylor commented: “Despite best efforts, significant amounts of money continue to be lost each and every year due to fraud and forgery of property title deeds, with the Land Registry bearing the brunt of these costs.
“This is not likely to change anytime soon as many of the issues created pre-recession still lie dormant.
“If interest rates go up, and more mortgages fall into arrears, the Registry is likely to face another wave of claims as defaults tend to reveal or highlight allegations of fraud.
“If those mortgages become unenforceable, the Registry – and the public purse – are vulnerable to claims of negligence.
“Fraud is not something that can be easily detected, so ultimately the responsibility falls on all parties – Land Registry, solicitors and mortgage lenders alike – to be as vigilant as possible and to collaborate even more to detect the signs earlier.
“Ultimately, however, the principle of a State Guarantee on property titles places liability for title fraud squarely with the Land Registry, so it is clearly in its own interest to lead the charge in the fight against fraud and forgery.
“No doubt this will continue to be a key priority for the organisation, particularly as Graham Farrant has recently become its new Chief Executive.”