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The Land Registration changes all Scotland’s mortgage holders need to know

Scottish homes

Do you own a home in Scotland? Thinking of remortgaging or perhaps taking out a loan against your mortgage for home improvements or the like? Then you’ll need to know that the way land and property deeds are officially registered is changing.

In 2012, the Scottish parliament passed the Land Registration etc (Scotland) Act, designed to enable an efficient and effective system for recording the ownership of land and property in Scotland.

Previously, property and land ownership in Scotland has been documented on the historic, deeds-based, General Register of Sasines, or the newer digital, map-based, Land Register of Scotland.

The former was closed to ‘standard securities’ in April this year, while the latter has been in operation since 1981. So if you bought your property after then, it’s almost certainly registered on it. And once it’s on there, it stays on there.

The aim is to eventually transfer all land and property titles from the first to the second register, creating a better picture of who owns what in Scotland, and to hold it on one, digitalised, publicly accessible map.

So what’s the issue?

The Scottish government wants to speed up this transfer, so has added on another trigger point to move new securities from one register to the other.

This means that if you ‘add a new security’ through remortgaging or additional borrowing with a new lender, you’ll need to make an application to move your property title from the Sasines to the Land Register. This is because new securities, with a different lender than before, can no longer be added to the old Sasines register under the new act.

However, if you remortgage or take out additional lending with your current lender, you won’t need to move your title over and would only have to pay the standard security fee, or administration charge, of £60.

What are the costs?

This is where it gets really complicated… As stated earlier, the standard security fee for registering a title is £60. This goes to the Registers of Scotland [ROS], and is usually paid through your mortgage lender, solicitor or conveyancer. You’ll also have to pay a registration fee based on the value of your property if you’re moving a property onto the Land Register through a routine trigger, such as a sale.

The new trigger is expected to mainly affect residential properties (the ROS estimates that between 4,000-5,000 people will be affected each year), and for these the costs is expected to be fairly low, as in most cases, there will only be one property title deed to examine.

But with more complex cases, say if the boundaries to your property are unclear, or you need access to reports to make your application for new or additional borrowing, you may be faced with higher, and potentially unexpected, costs as a result of the additional work required to submit an acceptable ‘plan’ of the property.

The cost of this is dependent on the complexity of the plan required, and on the fees charged by different suppliers, but may run into thousands. As an indication of how much you’ll be looking at, the ROS’ own plan drawing service costs from £90 for a simple property to £785 for a more complex one.

However, you’ll only really know how much you’re liable for once you find out how complicated the plan is. There are also likely to be additional legal costs associated with this process, as it’s usually a solicitor who submits registration applications on behalf of their clients.

Transparency is the issue

As new borrowing is a new trigger point, we at Which? keen that homeowners are made aware of the changes and potential costs they may be faced with if they go down that route. We also want to make sure they aren’t overcharged or exploited as part of the process. Your solicitor, conveyancer or mortgage adviser may be able to tell you early on about the existence of the new costs, but may not be able to say what exactly the costs will be for your particular circumstances.

We spoke to the Council of Mortgage Lenders, who we’re working with to ensure transparency of mortgage fees, and it said it would be up to individual lenders as to whether they passed on any additional legal costs incurred to their customers. It also said that it encourages members to be as transparent as possible about the potential costs their customers face.

We also spoke to the Law Society of Scotland, but it is yet to clarify its approach.

If you have more questions on costs, check out the ROS FAQs.

Have you discovered at the last minute that you’ve had to draw up a plan? Has it cost you more than you expected?

Comments
Profile photo of duncan lucas
Member

I was waiting for others to post on this as their comments might be directly relating to the points on house transfers/ownership etc relating to ordinary home owners but as time goes by– . My point is that this more to this than this Convo makes out , you live in Scotland Eva ? then you must know the bigger picture of the FM is to find out –WHO !! owns Scotland , you must know this is a big subject in Scotland as records show that HALF of Scotland is owned by just 500 people and guess what ? like North Wales most live abroad – Dubai-Egypt-Malaysia-Hong Kong -or the USA . Also you must know she changed the crofting laws to help prevent absentee land owners from evicting crofters and gave then m rights to buy their crofts or even first refusal , several western island communities were able to defy a landlord who wanted an extortionate price for his land . Scotland has still not forgotten the Highland Clearances where crofters –in the dead of winter were turfed out along with their wives and children and babies to make way for —–SHEEP !!! No wonder there are so many Scot,s names in America . Of coarse the landlords are “kicking up a stink ” — no wonder they dont like being named . I am looking on another browser of the list of foreigners we know about that own Scotland I doubt many speak English.

Member
Eva Groeneveld says:
10 October 2016

Hi Duncan, thanks for your comment. Yes, I do live in Scotland (I manage the Scotland office at Which?), and I am very aware of the land ownership debate, but I think it is such as massive debate, it would take a few more Convos to cover it than just this one! I have tried to limit this one to simply this issue of the charges that may apply for people who might be taking out additional borrowing on their mortgage!

Profile photo of duncan lucas
Member

Eva-Its a pity people living in Scotland dont seem to think this is an issue , I dont know if its the Scottish physic or what but you would think money would engender replies .If it applied to England I think the Convo would be full of posts.