Today I will lay before Parliament a departmental minute describing a new digital mortgage service, to be launched by HM Land Registry (HMLR) in 2018, and a resulting contingent liability.
It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances. It is also normal for the Department to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.
HMLR’s new digital mortgage service will enable borrowers to sign mortgage deeds digitally, speed up the re-mortgage process and improve the customer experience. A new liability risk arises with this service because HMLR will certify the identity of a borrower when that person provides a digital signature in advance of registration. This liability sits outside of the scope of HMLR’s existing statutory compensation scheme (schedule 8, Land Registration Act 2002).
The risk of the new liability occurring is considered low. The new process, where the borrower’s identity has to be verified through GOV.UK Verify combined with HMLR’s independent security processes, should in fact reduce the overall risk of fraud. To date GOV.UK Verify has not identified a single example of fraud despite in excess of 1.25 million citizens’ accounts having been created using the GOV.UK Verify service.
As with the existing indemnity, any costs incurred from this extension will be covered by HMLR’s resources as a trading fund.
Subject to no objections being received, I intend to authorise the proposal to undertake contingent liability for the digital mortgage service, after the usual 14 parliamentary sitting days.
The Government will be taking further steps to improve the home buying and selling process, following the publication last year of a call for evidence.