European Property Information24/07/2006 |
| EULIS: Removing Barriers to Cross-border Lending |
| The aim of the European Land Information Service (EULIS) is to provide easy worldwide access to European land and property information in order to underpin a single European property market. Developments are on track, and live running is expected to start during 2006. The author discusses the topics involved. |
| Jon Atkey, HM Land Registry, England and Wales |
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Demand for EULIS has arisen because European citizens increasingly want to purchase property in other countries and are looking for more choice of mortgages and other secured borrowing. At the same time, lenders are aiming more at marketing their products in other countries, and the professional advisors who act for both buyers and lenders need better access to cross-border information. By making it easier for professionals to do business in other jurisdictions EULIS aims to promote the economy of the European Community by:
Cross-border Links EULIS envisages that all the online land and property registration authorities of Europe will one day be linked together through a single portal, giving customers of any connected service ready access to information about individual properties throughout Europe. Despite integration within other areas of the economy, secured credit lending in Europe still takes place mainly within national boundaries. The reasons for this include:
It is widely held that increasing the volume of cross-border lending would benefit the economy of Europe. Capital could flow to areas where it is needed most and increased competition between lenders would help to reduce the cost of borrowing. Portal as Hub The EULIS partners all have widely used information services providing society with land and property information. They have aims in common besides securing tenure and interests in land; for example, facilitating dealings in real property and other interests in land, an essential service for a healthy financial market economy. Because of the number of diverse systems needing to be connected, a decision was taken early on that the technical design for EULIS should be as simple as possible. The chosen design achieves this using portal technology. The EULIS portal acts as a hub through which the different land-registration systems are linked. The EULIS service will be provided only via the internet and only via the national land information services connected to the EULIS portal. Customers will log on to their national systems in the normal way, after which they will be able to access systems in other countries through the EULIS portal. The national systems will take care of matters such as authentication, security, billing and firewalls. National providers will also provide their own customers with frontline support. Land and Reference The information provided through EULIS falls into two broad categories. Firstly there is information from the official land registers themselves, authentic information that has been registered about individual properties or loans. In EULIS, this is referred to as ‘Land information’. Secondly, however, and key to the success of EULIS, there is the ‘Reference information’. This additional information enables users to understand the outputs they receive from other countries and includes information on register contents, conditions for information usage, legal aspects, etc. The reference information is stored in the EULIS portal in accordance with an agreed standard framework and format, maintained and regularly updated by the participating organisations in an agreed and structured way. Although the content will be different for each country, the structure and format is the same for all participating countries, making it easier for users to navigate. It also enables comparisons to be made between the different countries and makes it simpler for new countries to join the service. Initially, information from the Registers will be presented in the language of the originating service. The possibility of translating the information into other languages will be a matter for future consideration. To facilitate cross-border understanding some national providers have in addition been developing multilingual versions of some parts of their service, including in particular headers and explanatory texts. The Strategic Case Studies have shown that despite the economic integration in many other areas of European activity, secured credit lending takes place almost entirely within national boundaries. According to the European Commission’s Forum Group on Mortgage Credit, at the end of 2002 outstanding residential mortgage loans in the then fifteen member states stood at €4 trillion, 40% of GDP. However, lending across borders without the need for any sort of establishment by the lender in the member state in which the consumer debtor resides represents less than 1% of European mortgage credit activity. A recent study estimates that greater product availability could result in market expansion of up to 10% and an increase in mortgage balances. For consumers, further mortgage integration could bring greater choice of products and lower prices. Competition between lenders could also result in lower mortgage interest rates. For lenders, the creation of a deeper and more liquid secondary market in mortgage debt would act to lower funding costs. Integration would bring reductions in credit and risk-management costs as a result of diversification and scale of activity, lower servicing costs as a result of the increase in lenders and service providers, and more effective capital flow. Citizens are therefore generally not benefiting from the range of choice and competitive pricing that increased cross-border lending would bring. Target Users Although it is ultimately the citizens of Europe who have the most to gain from EULIS, its target users are the professional intermediaries through which citizens act, like lawyers, conveyancers and notaries, and service providers such as lenders and real-estate agents. Public-sector organisations also have an increasing need to access land information across national borders. These stakeholders are interested in efficiency; ease of access is important to these groups, as is the ability to understand the information received, in context, and the implications. The scope of the EULIS programme goes beyond the European Union, but for practical reasons is limited to the continent of Europe. The service will start relatively modestly with a range of key online services from the founding partners and other early adopters, but will expand and extend over time in terms of land-information services and countries. Governance of EULIS Who will develop and operate EULIS? A consortium of land-information authorities belonging to eight countries has been responsible for initial development: Austria, England and Wales, Finland, Lithuania, Netherlands, Norway, Scotland and Sweden. The consortium has also taken on the task of launching the service and operating it for the first three years. However, as EULIS expands to link up more and more countries within Europe it will be necessary to develop a governance structure to meet the practical requirements and constraints of all of the different organisations that will be involved. The majority of these are government bodies of one form or another, each with their own set of rules for operation and governance with which they must comply. In discussion with prospective partners the consortium has considered a range of different types of corporate vehicle that might be appropriate to oversee EULIS in the longer term. Such a vehicle should not favour any of the participants and should be effective in managing, running and developing the service and business. It should also be easy to add, and possibly remove, members. Funding Revenue Funding has been an important consideration for the EULIS consortium because it is formed of public-sector bodies, most with strict rules governing the sources and application of funds. Funding from the European Commission has therefore been a key enabler, initially in exploring the feasibility of the concept. It may subsequently prove key in helping the consortium achieve ‘critical mass’ and in helping some of the poorer countries of Europe to participate. The ongoing running costs of EULIS are relatively modest and will be shared equitably between participating organisations. EULIS will generate income for the participants in two ways. Firstly they will receive their usual fees for any information provided to customers in other countries. Secondly, they will be able to charge their own customers a surcharge for the information they purchase from other countries. Consortium analysis of the likely cash-flow scenario shows that in the long-term very modest numbers of transactions are required to achieve break-even and to keep the operation viable. The keys to success will be achieving customer take-up and adequate European rollout during the initial years of operation. Further Reading
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| Biography of the Author(s) Jon Atkey is a chartered management accountant and Head of Strategy and Finance in HM Land Registry’s E-Conveyancing Programme for England and Wales. As the representative of HM Land Registry on the EULIS Programme Management Group he has played a leading role in developing the strategy and business case for implementing EULIS, following the successfully completed EULIS Demonstrator Project. Before going into e-conveyancing, Mr Akey’s experience included strategic planning, project and programme management and finance, including electronic payment systems and security. |
| References |
| http://www.eulis.org |
| http://www.landregistry.gov.uk |
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| Archive |
| Archive > July 2006, Volume 20, Issue 7 > European Property Information |
