Land Registry consults on fixed Scale 2 fees – and floats Scale 1 next

HM Land Registry is consulting on restructuring its fee order, and the headline proposal is a straightforward one with some not-so-straightforward consequences: Scale 2 fees would stop being calculated by reference to value and become a single fixed fee instead.

What Scale 2 currently covers

Scale 2 applies to applications that do not involve a sale for value in the ordinary sense: transfers of equity, assents, appointments of new trustees, charges and some registered leases. At present the fee is banded by the value of the property or the amount of the charge, running from a modest sum at the bottom of the scale to several hundred pounds at the top, with reductions available where the application is lodged electronically through the portal or Business Gateway.

That banding is the source of a steady trickle of friction. Conveyancers have to evidence value, HMLR has to check it, and where the two do not agree the application attracts a requisition and the clock starts again. Fee-related requisitions are among the more irritating categories precisely because they are administrative rather than substantive – nothing about the title is wrong, the cheque is simply the wrong size.

The proposed fixed fee

Under the proposal, a single fixed Scale 2 fee would apply regardless of value, with the existing digital discount preserved. The attraction for HMLR is obvious: less assessment work, fewer disputes, more predictable income, and a clearer path to automated processing of applications that are already largely mechanical.

The attraction for practitioners is more mixed. The worked examples published alongside the consultation make clear that a flat fee is not a neutral change. Low-value applications that currently sit in the bottom bands would pay more – in some cases several times more. High-value transfers of equity and large charges would pay less. A transfer of equity on a modest property between family members, or an assent on a small estate, is exactly the kind of matter where a sharp percentage increase will be noticed by the client even if the absolute figure remains small.

That has practical consequences for quoting. Firms that build disbursement estimates from value bands will need to rebuild those assumptions, and anyone running fixed-fee transfer of equity or probate packages will want to check whether the registration element still works at the new rate. Estimates given now on matters that will complete after any change takes effect are worth flagging as subject to revision.

Scale 1 is the one to watch

The more significant signal sits slightly further down the document. HMLR indicates that a comparable restructuring of Scale 1 – the fees payable on purchases and first registrations – is under consideration for a later stage. Scale 1 is where the value-based element really bites, with the top bands running into four figures on high-value transactions, and a move to fixed or flattened fees there would be a far larger redistribution than anything proposed for Scale 2.

There is also an early steer on regular, inflation-linked uplifts. HMLR fees have historically moved rarely and unpredictably, with long periods of stability followed by a step change. A move to routine indexation would make fee levels easier to forecast year to year, but it also means the current figures should be treated as a floor rather than a settled position.

What to do now

Three things are worth doing before the consultation closes. First, run your own numbers: take a representative sample of recent Scale 2 applications and compare the fee paid against the proposed fixed figure. That gives you a real answer on whether your caseload gains or loses, rather than an impression. Second, check how your fee tables, quoting tools and client care letters express registration fees, and identify what would need to change. Third, respond. Consultations on fee structure attract fewer responses from practitioners than they should, and the firms that actually lodge the applications have the best evidence on where a flat fee produces odd results.

The direction of travel is clear enough: simpler, more automatable, less value-sensitive. Whether that is a good trade depends very much on what your applications look like.

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