Technology could make the title register less attractive to private buyers.
'Shortly' is one of the most annoying words in the government's vocabulary. In today's budget, chancellor George Osborne deployed it to explain when he will consult on 'options to move the operations of Land Registry to the private sector'.
We have been through this at least twice before, so we can predict what options will be up for discussion. Broadly, the choice will be presented as between transferring the registry to the private sector as a going concern, retaining it in the public sector while maximising revenues by moving its operations up the value chain (the status quo with a bit more commercial nous) or splitting core statutory functions from value-added ones which can be flogged off or routed through a commercial partner.
Each option will have its supporters, but I suspect that the great and good will incline to option two. What's not to like about a body providing an essential public service remaining in public ownership while returning a profit to the taxpayer? (Other examples beloved by the chattering class include Channel Four and Ordnance Survey.)
The objection is the opportunity cost of a state monopoly trading in the market. Government 'trading funds', like Land Registry, don't necessarily have to act unethically to have a chilling effect on competition. I know from personal experience how galling it can be to queue at a ministry reception to get in to a meeting while the head of a publicly owned competitor swans straight through to the same meeting at the wave of a Whitehall pass. Public bodies should exist to do stuff that the private sector will not, and not dabble in business.
That's one issue likely to be overlooked if the goal of the consultation is a quick sale. Here's another. What if the very model of a central secure register of title is rendered obsolete by new technology? What if the register could be maintained even more securely than at the moment if it was held, and updated as required, by the community of its users?
The concept is counter-intuitive and, at the moment, impractical. However, fast-emerging technological developments based on strong encryption could change that. The most talked about is one known as the shared ledger, which underpins the peer-to-peer digital currency Bitcoin. If you want to know how it works, I'll recommend some reading at the end, but for the moment the important thing is that a shared ledger distributes an encrypted cumulative chain of every transaction across a large number of nodes and updates it at regular intervals from a copy chosen at random.
The concept of a user community is counter-intuitive and, at the moment, impractical. But that could change
There is no hierarchy, no single point of failure, just cryptographic proof of every transaction on the ledger. As attempts to subvert the chain are bypassed by the power of consensus, the distributed ledger cannot be compromised from any single node, or group of nodes.
This cryptographic technique, called blockchain, enables Bitcoin to avoid the instant hyper-inflation that has plagued every other pure currency as soon as it hits the real world. But in principle a blockchain distributed database could store any kinds of digital data, not just money. A property register, perhaps?
What makes this particularly interesting is that transactions stored recorded on blockchains can take the form of 'smart contracts', which verify, execute and enforce the terms of a commercial agreement with no human action. Such as a charge on a property, perhaps?
Of course blockchain technology may turn out not to be scalable, and its security may be compromised by new developments in computing. More important, a lot of institutional mindsets are going to have to change before the integrity of the nation's property wealth is entrusted to a technology best known for facilitating illegal drug deals.
But as the science writer Matt Ridley observes in his new book The Evolution of Everything, revolutions come from the bottom up. Once the basic open-source software is written, a shared-ledger based property register could be maintained by a self-interest community of independent users. For the sake of the argument, we could call them solicitors. And a peer-to-peer title register, perhaps a high-tech version of old-style deeds registries, may prove a better fit with England and Wales' common law culture than a central register, whether owned by the state or private business.
Again, at the moment this is science fiction. But if the Land Registry consultation is to be more than a quick flogging-off exercise it should take all possibilities into account. And potential investors who think the single register of property title is an asset whose value will persist down the decades should perhaps exercise caution.
Michael Cross is Gazette news editor
Readers with a little knowledge of computer science and cryptography terms will be able to cope with the new undergraduate textbook Bitcoin and Cryptocurrency Technologies published by Princeton University. For a basic introduction to cryptography, Simon Singh's The Code Book is an excellent read. For an introduction to the thinking behind Bitcoin, and its potential impact, see Dominic Frisby's Bitcoin.