Fully Digital Property Transactions a Step Closer

by | Apr 21, 2023

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Bank of England, HM Land Registry, Bank of International Settlements and Coadjute unveil Revolutionary Settlement Prototype. The property settlement process is set to vastly improve thanks to a ground-breaking collaboration between the Bank of England, HM Land Registry, Bank of International Settlements and Coadjute. 

The Bank of England announced the completion of Project Meridian, a digital synchronised settlement prototype promising to reshape the way property payments are conducted, benefiting consumers, businesses, HM Land Registry and the wider property market. 

Property is the largest asset class in the UK with more than 1,000,000 properties changing hands each year, in an exchange that is a key moment in many people’s lives.  

 
 

Completing the property transaction requires both the transfer of large sums of money and the need to update the Land Register to reflect the transfer of title. 

The current reality of this process is complicated, manual and at significant risk of fraud. It involves buyers, conveyancers and lenders pushing individual payments between accounts, requiring numerous manual steps and repeated reconciliation.  

As a result, buyers and sellers often find that payment transfers don’t go as planned on completion day, causing delays to keys being released, or sales to even fall through.   For new owners waiting with their removals van, the process can be opaque and stressful.

 

The new approach used in the prototype announced today replaces the numerous manual steps and checks and avoids the exchanging of paper-based documents entirely, cutting the risk of fraud or transactions being delayed at the eleventh hour.

The settlement prototype works by digitising the workflow between the commercial Banks, the Bank of England and HM Land Registry. Conveyancers connect to the service and send instructions which reserve funds.  

Then, at a pre-set date and time, the funds for that property transaction, or even for a whole chain of transactions, are moved in synchronisation. Immediately the funds are moved, digital deeds are issued, and instructions sent to HM Land Registry to update the register.  

 
 

The prototype paves the way for the process to be made significantly more transparent and efficient, and reduces the risk of fraud.

John Reynolds, Project Director and COO at Coadjute, said “Settlement is particularly complex and can only be tackled through deep collaboration and partnership with the public sector. What the Bank for International Settlements (BIS) Innovation Hub London Centre has done fantastically well here is create an open, innovative and collaborative environment for the public and private sector to work together to do just that.”

Dan Salmons, CEO at Coadjute, said “I’ve spent most of my working life leading payments innovations in Banks and FinTechs – I was there in the early days of contactless cards and mobile payments – so know first-hand what it looks like at the start of a genuine change to the way we all move money.

 

“Few payments are more important than those for property, and the work the Bank of England, HM Land Registry, Bank of International Settlements and Coadjute have done to reimagine the settlement process is extraordinary. We look forward to seeing the impact this project will have on shaping the future of property transactions.” 

Read the full report: https://www.bis.org/publ/othp63.htm

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