New digital ID cards will make property transactions "swift and easy" while "saving lenders billions"

NEW digital ID cards would speed up property transactions, conveyancing and mortgage applications, property experts have said.

Prime Minister Keir Starmer has introduced the new digital ID scheme he hopes will help combat illegal working.

The scheme will be available to all UK citizens and legal residents, saving time by ending the need for complicated identity checks which often rely on copies of paper records, Labour says.

And property experts have shared another positive for the scheme – they will speed up applications.

While other experts did say the new scheme will have no effect or even have a detrimental effect on property transactions.

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it would save lenders billions.

He continued: "Implemented properly, this could significantly reduce fraud and save lenders billions, with the added benefit of cutting down time in the conveyancing process. 

“The current methods of ID verification rely on certified copies passed on email or clunky online apps that some firms charge up to £75 to use each time. This could also remove barriers for smaller lenders to enter new markets, such as the growing expat opportunities where ID verification has traditionally been an issue."

Scott Taylor-Barr, Principal Adviser at Leicester-based Barnsdale Financial Management, said the new scheme should make property transactions swift and easy.

He added: "The present system of verifying ID as part of a property transaction is best described as 'clunky'. Each element of the process needs to independently verify ID, so the estate agent, mortgage adviser, lender and conveyancer all need to do ID checks. 

"This could be taking a physical copy of your ID to them, or getting a certified copy, or you could be asked to use an electronic ID check (which some people will then charge for). So, if digital ID can cut through all of that and allow all elements of the property transaction to ID individuals to be swift and easy at no cost, that can only be a good thing and will remove at least some degree of friction from the process."

Chris Barry, Director at London-based Thomas Legal, said it would make the process smoother.

He continued: "Identifying those involved in a property transaction goes far beyond just the client involved. When purchasing a share of freehold or leasehold property, identification may need to be obtained from other freeholders and landlords. 

“This can currently take weeks depending on the amount of third parties involved and having this information readily available would certainly help make the process smoother.”

Whereas other property experts said it would have no effect on the market.

Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said: “ID cards would do nothing to expedite the house buying process, as verification of identity takes very little time or effort within the current process. There will be next to no benefit to any sector from digital ID cards.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, agreed they won't make a difference

She said: "Verifying a client's ID is the least of the challenges facing property purchases and sales. We already have verified ways to do this. Given the current protracted process for legals, valuations and mortgages I can’t see how ID cards will make a difference. 

“Once mortgage brokers have gathered and checked the initial information and submitted this, it’s left to the internal processes of other agencies to do their thing. Until that is sharpened up with robust service level agreements, everything else is just tinkering at the edges.”

Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, said they will be easily replicated by hackers.

He added: “Unless Digital ID Cards entitle you to a discount in property price or increased income multiples, they’ll do naff all to help homebuyers. Checking ID takes no time at all, the concern with digital ID is the potential for fraud. Within 24 hours of release, hackers will have started to figure out how to clone and replicate it.”

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, was scathing.

He continued: “Taking the existing system and putting it in a skip and starting again is the only thing that could speed up housing transactions. The system is broken and needs to be brought into the 21st century.”