Anyone who has bought or sold a house in the United Kingdom will tell you how stressful it can be. Endless paperwork and a penchant for financial institutions to change their minds on a whim are the norm. Blockchain technology is one solution to the process. Read on as we discuss its possible implications for the UK property market.
Smart Contracts in UK Property
The real asset the blockchain provides lies in two factors: smart contracts and immutable data. In the first instance, a smart contract is a digital contract stored on the blockchain. When certain requirements are met, it automatically executes the contract.
As anyone who has been part of a house buying process will tell you that when going through a traditional financial institution, this process takes a long time. Even if all criteria are met, they still need to be overseen and signed off. This is not the case when using smart contracts.
It is similar to the process used when you sell property to a cash for home company. They will have all the contracts and documentation in place, ready to go. Turnarounds can be done in as little as seven days, and end dates can be agreed. Smart contracts do basically the same thing. Once the criteria are met, the deal is executed and fulfilled.
The second advantage comes from immutable data. Anything stored on the blockchain is kept there and cannot be changed. When it comes to details and personal information, this is also an asset. It makes it easier to retrieve and check also speeding up the agreement.
Land Registry and the Blockchain
In the United Kingdom, the HM Land Registry has already begun to experiment with the begun to experiment with the idea of blockchain as a way of speeding up services. The experiment’s idea was to simulate a digitally transferred process with an automatic update to the land registry. The pilot was done with a range of groups collaborating, all of whom were involved in an actual house buying process. They ranged from revenue and customs representatives to payment gateways and conveyance firms. By sitting down on a conference call, each party completed their part of the process and passed it onto the next. This simulated what a smart contract would do. This made the whole mortgage process take around ten minutes.
Nigeria’s Stance on Land Registry
While only an experiment, Nigeria is one country taking it a step further in a bid to cut down on backlog and tackle land fraud in one fell swoop. There, the backlog for processing title deeds is over a million households. This is against rising land fraud cases that are estimated to cost the country $470 million a year.
It is hoped the blockchain will be able to make immutable records of who owns lands, cutting down the methods by which fraud can take place. With this, smart contracts will work through land registration processes, speeding up the buying and selling of property.
If the government’s pledge to build one million new houses over the next four years comes to fruition, then this technology will be much needed. Not only could it speed up processes, but it could also help alleviate a UK housing crisis much quicker than anticipated.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
