Deregulated systems preferable to notaries

Monday, 14 April 2008 12:00 AM

A European Commission (EC) study has found deregulated legal systems are preferable to their notary counterparts for consumers in terms of price and choice of conveyancing services.

Following a first of its kind study across 21 European Union nations examining the cost and performance of conveyancing services, a deregulated system, such as that employed in England and Wales, was found to be cheaper and more efficient.

Conveyancing services comprise, for example: pre-contract searches; transfer deed drafting; signature certification; and deed registration in the Land Registry.

The research found the deregulated system in England and Wales was cheaper than the Latin notary system used across most of continental Europe and also secured strong assessments in terms of quality of service.

Property turnover across the 27 countries that now make up the EU was ?1,800 billion (£1,440 billion) for 2005, with the corresponding turnover in conveyancing services being around ?16.7 billion (£13.3 billion).

England and Wales, with just 11 per cent of the population and 15 per cent of Gross Domestic Product (GDP), contributed 30 per cent to this property turnover.

The survey also found England and Wales falls into the lower range of transaction costs at one to seven per cent of value - along with Scotland, Ireland, the Czech Republic, Denmark, Portugal, Slovenia and Sweden.

"Buying a house may seem like a nightmare at home, but this survey suggests the cost of transactions abroad is likely to be higher," said professor Peter Sparkes from the University of Southampton - the national reporter for England and Wales.

"It is very unusual to have chains of transactions on the continent and so there tends to be one lawyer dealing with the document who advises both seller and buyer.

"Our system of chains helps to safeguard against the risks of a downturn of the kind that may be underway at present.

"Although it is very difficult to compare transaction costs, because of varying rates of stamp duty, it is no surprise to find our system among the cheapest in Europe" , argued Mr Sparkes.

The EC will now consider whether to take action to liberalise access to conveyancing services, a position supported by the UK government.

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