By publishing property sale results, the Land Registry has made curtain twitchers of us all. And that’s a good thing, says Ross Clark
TO MANY PEOPLE the Land Registry is just another of those tedious government quangos which lies somewhere between the Agricultural Wages Board and the Inland Waterways Advisory Council. But it holds the key to an issue fascinating a large number of people: is the upper end of the London property market really as buoyant as some suggest, or is its renaissance just a load of hot air blown up by desperate men who make their money from flogging property?
If it weren’t for the Land Registry, hyping up the property market would certainly be a lot easier. There would be no way of challenging the rumoured sales, for example, at One Hyde Park, the Candy brothers’ development in Knightsbridge. In 2008, just before the financial meltdown, one of the flats was reported to have been sold for £100 million. Two years and a banking crash later, the story of the development seemed improbably to have got better and better: this time, a penthouse was reported to have gone for £140 million. More recently, a name has been put to the buyer: Ukrainian businessman Rinat Akhmetov. Reports — always based on unattributed rumours — have suggested as many as 60 per cent of the 86 flats have been sold.
Yet the Land Registry provides a dramatically different story. The registry, which records the sale and price of every property sold in England and Wales, records that only two sales of flats at the development have yet been completed, one of which went to Christian Candy himself for a slightly more modest £31 million. The other, a three-storey triplex, sold for £40.5 million to Park One, a Cayman Islands company believed to be a front for His Excellency Sheikh Hamad Bin Jassim Bin Jabor at-Thani, the prime minister of Qatar. In addition, the Land Registry records that by early May contracts had been exchanged on a further 36 apartments — well short of the numbers previously claimed.
The picture of luxury property sales is complicated by stamp duty avoidance schemes, whereby a sale is structured in such a way that the buyer purchases a company rather than a straightforward property. Where these schemes are used, sales do not show up on the Land Registry, so at the very top end of the property market you cannot always be sure that the Land Registry is telling the whole story.
Finding out what people have paid for their homes is all very fascinating, but should we really have the right to this information? After all, nosy members of the public — or the press, for that matter — do not have the right to know what wealthy individuals have paid for their cars, their suits or their wives’ engagement rings. So why should property be any different?
The Land Registry placed sales prices in the public domain ten years ago. The reason was not to make it easier for gossip columnists to follow the ups and downs of our favourite celebrities and oligarchs, but rather to make it more difficult for criminal gangs, as well as corrupt estate agents and lawyers, to commit fraud. Nowadays, such scams can easily be rumbled: two sales would be recorded at widely different prices in quick succession, perhaps even on the same day. But then again, vendors can easily protect themselves from this trick by always seeking a range of valuations.
Making Land Registry entries public hasn’t done a lot to prevent the mortgage fraud that was prevalent at the height of the boom, when criminal gangs would conspire with corrupt surveyors to take out loans greatly in excess of what the properties they were secured against were actually worth. In fact, the opening up of the Land Registry has possibly inadvertently increased the risk of fraud. With sales price information available at the click of a mouse, mortgage lenders in many cases gave up the time-consuming business of having a surveyor visit the properties against which they were lending and instead tried to conduct the entire lending business in remote offices, with disastrous effects.
Having said that, though, I’m in the pro-nosiness camp: I like it when sales information is in the public domain. I have seen far too many people bamboozled by cocky estate agents into paying over the odds for their homes. The Land Registry allows you to check instantly what other properties have sold for in the same street, and to ignore the agent who tries to tell you, ‘The one over the road has just gone for £2 million.’ You can just imagine how easily we could be exploited if share prices were not published and we had to guess what we should be paying for our tiny slice of Vodafone.
Making sales prices a matter of public record — as has always been the case with properties sold at auction — makes it possible for anyone to spot if public properties have been sold off too cheaply, and see the profits MPs have made on their homes, courtesy of their parliamentary allowances.
Oligarchs and celebrities may resent having the price they paid for their homes splashed all over the papers, but if they are that sensitive to publicity maybe London just isn’t the right place to come.