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Property title fraud costing millions in England and Wales
Property title fraud is costing the Land Registry in England and Wales millions a year despite diligent efforts to combat fraud in real estate transactions, new research shows. Almost £10 million worth of compensation claims, at an average value of £168,900 per claim, were received by the Land Registry last year alone because of fraud or forgery, according to new data Obtained through a series of Freedom of Information. The data, requested on behalf of title insurance and property risk solutions provider Titlesolv, also shows that an overall total of £23.3 million worth of claims were received in 2014 and since the start of 2012, the Land Registry Indemnity Fund has received more than £59 million in claims and paid out more than £31 million against them. According to the data, the Land Registry has settled or paid an increasing number of the claims it receives, rising from some 78% of the claims lodged in 2012 to more than 86% in 2014. However, the actual proportion of the value of claims granted has dropped considerably over the same time period, from an average of about 80% in 2012 to just under 36% in 2014. In England and Wales, it is the responsibility of the Land Registry to check the veracity of an owners’ claim to a property when a title is registered, with mortgage lenders then using its records as one of the criteria for approving mortgage applications to check a criminal has not stolen an owner’s identity and is attempting to raise an unenforceable mortgage against a property. In recent years, the Land Registry has made progress in bolstering its governance, processes and records to defend against claims, however the number of claims remains stubbornly stagnant, the costs of which have to be shouldered by its Indemnity Fund. ‘Despite best efforts, significant amounts of money continue to be lost each and every year due to fraud and forgery of property title deeds, with the Land Registry bearing the brunt of these costs. This is not likely to change anytime soon as many of the issues created pre-recession still lie dormant,’ said Chris Taylor, chief executive of Titlesolv. ‘If interest rates go up, and more mortgages fall into arrears, the registry is likely to face another wave of claims as defaults tend to reveal or highlight allegations of fraud. If those mortgages become unenforceable, the registry and the public purse, are vulnerable to claims of negligence,’ he explained. He also pointed out that fraud is not something that can be easily detected, so ultimately the responsibility falls on all parties, the Land Registry, solicitors and mortgage lenders alike , to be as vigilant as possible and to collaborate even more to detect the signs earlier. ‘Ultimately, however, the principle of a State Guarantee on property titles places liability for title fraud squarely with the Land Registry, so it is clearly in its own… Continue reading
New residential rent controls take effect in Paris
The rental market in Paris is now subject to new rent control regulations covering all new residential leases and those that are up for renewal. The law seeks to cap rent increases from one lease to the next in the country’s largest cities as part of sweeping housing reforms promised by French President Francois Hollande during his election campaign. The policy is likely to be popular among tenants in the city who have seen home rents rise by 42% in the last 10 years, although it has been criticised by estate agents and landlords. Paris is the first city to see the law being enforced and it is likely to be rolled out in Lyon, Bordeaux, Marseille, Lille, Grenoble and other big cities in the coming months. The law allows the prefecture of each city to establish a maximum rents measured in euros per square meter based on when the property was built and where it is located. The levels must be no more than 20% above or 30% below the median rental price for the area. There is likely to be winners and losers. It is estimated that rents on around 60,000 properties are likely to come down and those of 25,000 to go up. The biggest decreases are likely to be for studios and one bedroom apartments, according to agents. The National Federation of Estate Professionals (FNAIM) said the law will hold back the rental housing market and put off buy to let investors. It is considering legal action and already agents in Lille have blocked the law being implemented by withholding housing and rent data. Continue reading
Lower end US homes just 10% below 2006 and outperform middle market sector
Lower priced houses in the United States have been outperforming the middle priced market and are now only 10% below their peak values of 2006, a new analysis shows. Middle tier homes, typically selling between $120,000 and $345,000, are the worst performing segment with current price levels 24.8% below 2006 peak levels, according to a new report from real estate firm Clear Capital. It says that this vast difference in market recovery underscores the continued challenges the majority of home owners face, despite a quicker recovery in both the bottom and top segments of the market. Regionally, there was a small uptick in quarterly gains in both the West and Midwest, between 0.3% to 0.1%, while the Northeast and South remained unchanged over the quarter, at 0.2% and 0.8%, respectively. These minimal changes reinforce housing’s continued moderation and suggest the initial thrust of the home buying season is starting to wane, according to Alex Villacorta, vice president of research and analytics at Clear Capital. He pointed out that disparity still exists at the local market level. The Northeast reports the widest gap in price performance between the top and bottom performing areas with Pittsburgh seeing growth of 14.1% year and year and Providence down 14.1%. At the national level, the data through July shows a 0.1% increase in quarterly gains, from 0.6% in June to 0.7% in July. ‘While this minor increase, a carry-over from spring’s performance, is expected as we enter the thick of summer’s peak demand cycle, it reflects the overall contraction from spring’s initial surge,’ said Villacorta. ‘Through the first half of 2015, we observed a housing recovery that is normalising after an impressive price surge from the trough of the market. After more than two years of a pretty remarkable upward swing, the housing market’s correction to the correction has given way to more normal rates of growth,’ he explained. ‘What we now know, however, is that this correctionary period has not treated all markets, nor segments within markets, the same. In the present environment, micro analysis is key. In particular, our latest data exposed a mid-tier lag. This segment is still way behind both the top and bottom of the market in terms of recovery over the last nine years,’ he pointed out. Indeed, the analysis of the change in home prices since the summer of 2006 shows that the middle tier has lagged behind both the upper end and lower ends of the market by a surprisingly wide margin. At 24.8% below its peak level, the middle tier is more than double that of the lower tier. Villacorta said that the lower tier was both hit and buffered by high levels of distressed activity which, in recent years, has sparked investor activity driven in large part by the accelerated demand in the rental sector. And, the top tier has benefited from a segment of the market that is more resilient to the current economic climate. ‘The middle… Continue reading
