Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
1/16
Why the United Kingdom does not have a cadastre – and does it matter?
Richard GROVER, United Kingdom
Key words: cadastre, land registration, general boundaries, efficiency of property market.
SUMMARY
The UK does not have a cadastre which makes it unusual amongst major economies. This
raises the question as to whether the absence of a cadastre undermines the efficiency of its
property market, particularly land registration and the workings of the mortgage market, or
whether the UK has developed other ways of protecting property rights. Land law does not
have a concept of ownership of the land itself but rather of rights over land. These are called
estates and estates are the building block of the land administration system rather than
parcels. Estates are four-dimensional constructs that include time as a dimension. They also
can overlay each other as rights to undertake or prevent different activities can be owned by
different persons for the same physical space. Although the UK has compulsory land
registration and proof of title is through entry in a Torrens-style land register, there is no
central record of the precise location of boundaries. Instead a general boundaries rule exists.
Ordnance Survey maps boundary features but has no power to determine private boundaries.
Boundaries can be determined using map evidence in conjunction with other sources.
Boundaries and boundary disputes are viewed as being a private matter between landowners
and not of public interest. This system works because the UK is an old-settled country with a
history of re-using boundaries over time. There are common law rules that help the
interpretation of boundaries and the doctrine of adverse possession puts a limit as to how far
back in time evidence of encroachment is valid. There is no evidence that the absence of a
cadastre harms either the economy or the workings of the property market. The British
economy is one of the largest in the world and the property market is active and efficient.
Factors like the prevalence of the rule of law, protection of property rights, good standards of
corporate and professional governance, and openness and transparency may be more
significant than whether there is a cadastre. The value added by a cadastre would be small
relative to its cost. At the heart of its absence is a philosophy of where property rights came
from and how they should be legitimised. There is no concept in land law that they derived
from the state. Therefore the notion that state permission is required to change boundaries or
to divide or unite plots is an alien one.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
2/16
Why the United Kingdom does not have a cadastre – and does it matter?
Richard GROVER, United Kingdom
1. INTRODUCTION
Cadastres are often seen as being one of the pillars of modern land administration systems
alongside efficient land registration, property valuation, real estate taxation, and land use
management systems. An effective land administration system, it is conventionally argued, is
seen as being an essential prerequisite for an efficient property market. Such a system should
include ways of ensuring that property rights are protected and that trading in land, the
transfer of property rights, and the raising of capital by pledging property as security can take
place efficiently. In order to achieve these ends modern land administration systems have
land registration to record property rights, their ownership and transfer, and cadastres to map
property rights and record their geo-co-ordinates. International aid bodies and aid donors
have promoted the creation of land registration and cadastre systems as prerequisites for
economic development. Such measures are argued to promote the fungibility of real estate
through the ability to raise capital secured against it, argued by de Soto (2000) as the reason
why capitalism has succeeded in the west.
It may therefore be something of a shock to discover that one of the five largest economies in
the world - the United Kingdom – lacks what is often seen as being a key element of an
efficient land administration system, namely it has no cadastre. The concept of a cadastre is
so alien that few British surveyors are familiar with the term and in discussions with them it
is necessary to explain what a cadastre is. Although the Royal Institution of Chartered
Surveyors does list cadastre as one of the competencies that candidates can offer to be
examined on as part of their Assessment of Professional Competence in order to obtain
membership, it is difficult to be certain as to whether any candidate has ever taken this
subject.
The absence of a cadastre in the UK does raise important questions about the role of the
cadastre role in modern land administration systems. If a major economy does not have a
cadastre, is creating a one essential for economic development? Does the absence of a
cadastre damage the British economy and the functioning of its property market? Or is the
absence of a cadastre just another example of Britain’s eccentricity, like driving on the left,
drinking warm beer, playing cricket, and calculating petrol consumption in miles per litre? In
other words not something that anyone with any sense would dream of following! Or is
Britain’s lack of a cadastre a historical anomaly – the result of not being invaded by French
troops after 1793 and of being an imperial power rather than one of the colonised? Or does
the absence of a cadastre raise fundamental questions about what a cadastre is for, whether
cadastres are the only or most effective means of achieving these ends, or whether there are
more important factors in determining the efficiency of property markets than those that
cadastres contribute to? Can, for example, property rights be adequately protected in the
absence of a cadastre? The absence of a cadastre does raise questions about the philosophy
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
3/16
behind property rights and how they are legitimised by a society. The absence of a cadastre
could suggest that Britain has chosen a solution to this question that is different from many
other countries.
2. LAND ADMINISTRATION IN THE UK
This section examines the system of land administration found in the UK and how it
functions in the absence of a conventional cadastre. However, before doing so, one should be
clear about what is meant by a cadastre. FIG in its Statement on the Cadastre states that
A cadastre is normally a parcel based and up-to-date land information system containing a record
of interests in land (eg rights, restrictions and responsibilities). It usually includes a geometric
description of land parcels linked to other records describing the nature of the interests, the
ownership or control of those interests, and often the value of the parcel and its improvements.
The UK has records of interests in land, their ownership and control, and their value. What it
does not really have is either a genuinely parcel-based system or one that accurately records
geometric descriptions of the areas under the ownership or control of the different interests in
land.
The land administration system is built around the notion of proprietary estates rather than
land as a physical reality. The idea of an estate is the relationship between the landholder and
his land. English law does not have a concept of dominium or direct ownership of the land
itself. Rather, proprietors own estates in (that is to say, rights over) land. The concept of an
estate may sound to be cumbersome but it has two important advantages. An estate is a four-
dimensional construct – length, breadth, height/depth and time. Rights and powers may be
executed for a period of time and then give way to other estates. A series of estates can (and
often do) exist for the same physical entity, with rights that are currently capable of being
exercised, contingent rights that may come into existence if certain events take place, and
reversionary interests for when certain estates come to the end of their life. Estates can also
physically overlay each other. Thus, for example, the right to graze woodland or hunt over it
can belong to a different estate to that of the proprietor who has the right to cut the timber.
The fishing rights over a river bank may be owned by a different person from the one whose
cattle can graze the land and drink from the river. Rights may be exercisable at certain times,
for example, the right to grazed pigs in an oak woodland area after the acorns have fallen but
not at other times of the year. Land can be farmed or grazed in common with others. Land
rights require multi-dimensional means to record them. Systems for doing so had evolved in
the millennium before there were means of measuring longitude or the theodolite came into
use, and have proved to be remarkably difficult for cadastres to dislodge.
The concept of estate means that it is of limited value to organise data by parcel. Ownership
of the parcel is, in any case, impossible as one can only own interests in it. Rather, the only
sound way to organise data is by proprietary estates. An individual can have more than one
proprietary estate so the data is organised according to the physical location of the estates.
The link between the cerebral concept of an estate and the physical reality on the ground can
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
4/16
be provided, in practice, by something that in British real estate taxes is known as a
hereditament, though this is not a term used in land registration. A hereditament is a property
that forms a single economic unit for real estate tax purposes with a single occupier
comprising a single geographical unit, being capable of separate occupation and put to a
single use. A hereditament could comprise several parcels. The hereditament rather than the
parcel is a suitable building block for land information since, as an economic unit, it brings
together the concept of an estate (the rights and interests) and the physical area over which
they are exercised.
The second issue concerns the geo-co-ordinates of the properties. There is no government
record of legal boundaries of properties and therefore no official geometric description of the
property. The Ordnance Survey maps boundaries and the features that comprise them. Since
1841 it has been required to show boundaries. However, it has no legal power to fix private
boundaries. Land Registry maps, which identify the location of a property, demarcate a
“general boundary” and do not determine the exact line of the boundary. This could be on
one side or the other of the boundary or down the middle or not follow what is recorded on
the map at all but are quite obvious from a site inspection. Other evidence than the map is
required to determine the exact boundary and this may involve common law rules as to how
boundaries are to be interpreted to demarcate areas under different ownership. For example,
how the boundary is constructed may enable the line of ownership demarcation to be
identified using common law rules. In the case of a hedge and ditch boundary, for example,
the line of ownership is presumed to lie on the edge of the ditch on the far side of the hedge
on the basis that the ditch digger dug to the end of his land and then planted the hedge on top
of the earth excavated. In modern walls and fences, ownership of the boundary is indicated
by whose land columns and supports are located. HM Land Registry does offer a dispute
resolution service to try to resolve boundary disputes. If these go to court, they often result in
the bankruptcy of both parties, providing a strong disincentive to pursue them. The idea of
general boundaries does not produce an infinite number of disputes because the law contains
a doctrine that terminates potential claims after a period of time. This is the doctrine of
adverse possession. An occupier can claim ownership of land is he has been in peaceful
possession of the property for a period of time. The interval of time needed to sustain such a
claim has varied over the years and is related to the general limitation period within which
legal action must be started after an event has taken place. In most cases, it is 12 years. This
means that legal action must be started within this time to eject a squatter or fight
encroachment or it is likely that the property will be lost.
2.1 Land Registration
Land registration varies slightly between the different parts of the UK for which there is
devolved government. This section focuses on the situation in England. Land registration is
currently governed by the Land Registration Act 2002. This act ensures that eventually all
land will be covered by a Torrens-style land registry with ownership being proved through
entry in the land register rather than by title deed. It has also enabled electronic conveyancing
to take place and the land register to become a document that can be directly searched by
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
5/16
enquirers through the internet rather than by enquiry to a land registry office. The land
register comprises:
• Property register, which identifies the location of the property, its extent, and any
rights that benefit the land, supported by a Title plan, which shows approximate
location and boundaries.
• Proprietorship register, which specifies the quality of the title, the names and
addresses of the legal owners, and any restrictions on their power to sell, mortgage or
deal with the land.
• Charges register, which includes details of mortgages and financial burdens, but not
of the amount involved. It also identifies other rights and interests to which the
property is subject, such as leases, rights of way and covenants.
The current position is one of compulsory land registration. However, this has been on a
sporadic basis. Mandatory first registration is triggered by certain events, such as the transfer
of a freehold or leasehold with more than seven years to run, the creation of a lease of more
than seven years, and the creation of a mortgage. The process of compulsory land
registration has been going on since 1926, though voluntary land registration has existed
since 1887. Initially it only applied to specified geographical areas. Since 1990 it has covered
the whole country and 59% of England and Wales is now registered land (HM Land Registry
2007). The plan is to complete land registration by 2012. The situation is, in practice, better
than this figure indicates as about 85% of titles are registered. There are a few large
landlords, typically owning large areas of rural land, who have not experienced one of the
trigger events that make land registration mandatory. These include a number of government
bodies, other institutions like parts of the Church of England, and some, mainly aristocratic,
private owners whose land is held by trusts. As these bodies are all immortal, transfer on the
death of the owner has not been a trigger event for land registration. There is currently a
campaign being run by HM Land Registry to encourage owners of unregistered land to
register this by offering a discount on the normal fee and this has brought into registration
significant areas of previously unregistered land. Registration offers significant advantages to
owners in defending their land against trespass and encroachment, as well as providing a
cross check for organisations when drawing up their balance sheets. Failure to register
landholding by any public body is indefensible given the potential exposure to loss from
encroachment as a result of failure to register when compared with the minimal costs of
registration.
Proprietary interests are divided into major and minor interests, though this terminology is
not used in the legislation (Gray & Gray 2005). Major ones are principally freeholds and
leaseholds of more than seven years. Their first registration gives rise to a uniquely assigned
title number. Most other sorts of proprietary interest, such as mortgages, and rights of entry,
are then entered against the title number of the estate burdened by them and often also against
the title number of the estate that benefits from them. It is possible for there to be both
registered and unregistered interests in a parcel where, for example, a long lease has been
registered but the freehold has not.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
6/16
Proof of ownership is by entry in the land register and is backed by an indemnity fund
providing compensation for fraud or error. Historically proof of title was by means of title
deed. Only two areas in England, Middlesex (a major part of London) and Yorkshire, had
deeds registers. Purchasers had to carry out due diligence through searches for deeds. The
problem with a deeds system is that title is passed from one purchaser to the next and any
break in the chain can potentially undermine the claim to possession. Under a common law
system there is no absolute proof of ownership, just a claim to possession that is better than
that of any current challenger. A land registry system, by contrast, offers absolute certainty of
ownership for registered land, particularly if it is supported by a government guarantee of
compensation in the event of error. Where proof of possession is through title deeds, there is
a significant cost of due diligence when purchasing a property of checking the documents,
particularly if there is no deeds register. However, a backstop exists on searches because of
the doctrine of adverse possession. Under this rule, a period of undisturbed occupancy of land
without challenge to possession (normally 12 years) enables the occupier to claim ownership.
With mortgages, the lender used to take physical possession of the title deeds, which would
not be released until the mortgage was repaid.
Before compulsory registration began in 1926 the system was not quite as disorganised as
one might have thought. Evidence of the confidence in the system is that, unlike USA, there
has never been any significant amount of title insurance in Britain, principally because
conveyancing is mainly by solicitors who have professional indemnity insurance. Until 1925
many owners of real estate possessed a tenure called copyhold rather than freehold. Under
legislation passed in 1925, copyholds were converted into freeholds. Copyhold is the tenure
derived from villeinage (serfdom). The copyholder proved title through a copy of the deed of
entry recorded in the manorial register by the lord of the manor. Copyholders paid an entry
fee when they took possession of the land and also paid an annual quit rent. Both these were
nominal sums by modern standards, typically having been fixed by custom in the fourteenth
or fifteenth century. However, these payments obliged the lord of the manor to defend the
copyholder’s possession of the land as the lord had accepted the copyholder as his feudal
tenant. Manorial courts were held to collect these sums, to register new entrants, and take
action against those who broke customary land laws. The conversion of copyhold to freehold
meant that the government had to replace the private manorial court registers with a state one
if it was to provide a similar level of assurance about title as the former copyholders had
previously enjoyed.
Legislation in 1925 listed those estates recognised by statute. Not all estates at that time were
recognised in the new law but other estates could exist. Their owners had an equity right
rather than a legal one. The move from a common law tenure system to one based on statute
law therefore has implications for property rights as no all rights may be recognised by
statute even though they can be enforced. Similarly the change from a deeds system to land
registration may mean that certain rights, particularly those not recognised in statute, may not
be capable of being registered. Land registration law defines which estates and rights can be
registered. For example, since 1925 a minor cannot own a legal estate, although a minor can
hold an equitable interest in a trust set up to exercise legal ownership on his behalf. The
maximum number of co-owners who can hold a legal estate was set at four. Additional
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
7/16
owners may exist but they have an equitable and not a legal right. The interests that had to
agree a transfer of land after 1925 was limited to the owner in fee simple, excluding those
with reversionary interests in tail. Rights which are not recognised as legal rights and ones
that cannot be registered are potentially more difficult to maintain and enforce than statutory
rights that have been registered. It is likely that over time many unregistered rights not
recognised by statute will wither away and the main unregistered right that will continue to
exist will be leases of less than seven years. Customary rights can survive as registered rights
in the form of easements or because land is registered as common land or because rights are
appurtenant (that is attached) to other registered land. However, many types of estate that are
not regarded as being legal estates recognised by statute and cannot be registered are likely to
disappear in the way that the many local customary variants of copyhold and freehold did
with the development of a statutory based system.
One particular casualty of change is likely to be the doctrine of adverse possession. The UK
government lost the case of J A Pye (Oxford) Ltd v UK in the European Court of Human
Rights in 2005. The Court ruled that as a result of land registration rules the government (and
not the squatter) had unfairly deprive Pye of its property. Land registration rules were
changed so that notice has to be given to the owner of the squatter’s intention to claim
adverse possession. This in effect gives the owner two years to start legal action to oust the
squatter and frustrate the claim that there has been peaceful occupancy for the required
period.
Land registration has subtly changed the concept of ownership of real estate from the
common law position of being the person with the best claim to possession towards an
absolute claim of ownership by virtue of entry in the land register. There have been losers in
the change to a land registration system but the losses have been relatively minor, though, as
with the adverse possession rules important modifications have had to be made to avoid
undue hardship. The benefits have been speedier, cheaper and more reliable conveyances, an
open land register that is easy for anyone with internet access and a credit card to search 24/7,
and improvements in the protection given to lenders of mortgages by signalling to the world
that the property is encumbered with a charge. These advantages have overcome the
traditional resistance that British property owners have had towards government interference
in their property rights. The efficient transfer of property and protection of property rights
through a land register have come to be accepted as a public good that benefits all. However,
the traditional resistance to government intervention in property rights still remains. In 2008
the government introduced of a Home Information Pack. Vendors are required to supply
buyers with specified information about the property. The intention was to speed up
purchases of residential property by eliminating the delays whilst the purchaser’s solicitor
obtains key information from the vendor’s and from local authorities. There has been
criticism of the scheme and its cost even though most of the information is material that the
vendor would have to supply anyway. The supposed advantages have yet to win over some
sceptical interested parties like mortgage banks, who refuse to accept some of the information
that was intended to be in the pack, like a survey and valuation, and have insisted on retaining
their own.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
8/16
2.2 Mapping
The official mapping agency in the UK is the Ordnance Survey. As the name suggests, its
origin was military. The 1745 Scottish Rebellion brought home to the government the need
for detailed maps identifying which roads and bridges were capable of taking artillery and
this resulted in the mapping of the Scotland Highlands by William Roy. Roy’s proposals to
extend mapping to the whole of the country were not acted upon. Threat of invasion by
France after 1791 led to large scale mapping of the southern England coastal counties using a
new Ramsden theodolite. Large scale civilian mapping began in 1841 when the Ordnance
Survey was granted the right to enter land and the map boundaries. Before this date many
private maps had been produced but the spur to public mapping was the realisation that
urbanisation and the new transport and other networks that resulted required accurate large
scale maps. By 1895 it had completed the mapping of the country at a scale of 25 inches to
one mile.
Military involvement in the Ordnance Survey ceased in 1983. Since 1990 it has been an
executive agency of government. It functions as a self-funding body. This means that it is
expected to finance its activities from fee income paid by users rather than government grant.
Digitisation was completed by 1995. Since 2001 the Ordnance Survey has maintained a
Master Map geo-spatial database to which layers of information can be added, including ones
by outside users. Postal addresses can be linked to the map. There are 440 million TOIDS to
which other data can be linked. A wide range of outside users have produced their own
customised map-based digital databases. For example, police forces map crime incidents.
Local authorities also add layers to help them plan and provide public services for example
census data and town planning applications.
2.3 Cadastres in the UK
Strictly speaking, it is not correct to say that the UK does not have a cadastre. Rather what it
has are two types of cadastre that fulfil very specific functions. What the UK does not have is
a general cadastre. The two types of cadastre are those for agricultural land and for real estate
taxes. These have been created to enable the government to fulfil specific functions.
2.3.1 The Rural Land Register
The Rural Land Register has been created in order to implement the changes made in the
EU’s Common Agricultural Policy made between 2003 and 2005. This has seen the EU move
from a system of agricultural subsidies in the form of guaranteed prices to farmers for
particular products to one in which subsidies are paid according to the agricultural land
occupied (FAO 2006). The aim was to bring an end to the system by which farmers were paid
to produce products that were surplus to requirements whilst still providing subsidies to
support rural areas. The change has required modifications to the Integrated Administration
and Control System (IACS) used to ensure that correct payments are made to farmers and
that there is traceability of payments. In order to make the payments, Member States had to
create and maintain a database of agricultural land parcels with their sizes and geo-references,
which is linked to records of farmers and their aid applications. Each parcel in the Utilised
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
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Agricultural Area (UAA) has to be correctly identified and measured and records kept of the
persons who are permitted to make claims. Checks on claims are needed to ensure that the
land is part of the UAA and that multiple claims are not made for any parcel. As land can be
transferred between farmers, removed from agricultural production, or parcels can be joined
together or divided, the register has to be capable of being updated. The EU has set tolerances
for the accuracy of measurement of 5% or 1.5 metres to the perimeter, with a maximum
tolerance of for each parcel of one hectare.
The introduction of the new system resulted in significant problems in England (though not
the rest of the UK), with serious delays in making payments to farmers (NAO 2006). Partly
this was because England chose the most complex option for payments to farmers, but
problems were also encountered with inaccurate maps and the time it took to resolve these.
The Rural Payments Agency, responsible for operating the system, is an executive agency of
government. The problems proved to be so serious that the management was disciplined. In
other words in classic New Public Management style, the managers had the powers to
achieve the task devolved to them and were incentivised to achieve them, in this case, by
being disciplined for failure rather than rewarded for success. The cost of establishing the
Rural Land Register for England was £16.1 million compared with an estimate of £6.8
million, which included £9.8 million being spent on mapping applicants’ land. One
significant aspect of the Rural Land Register is that agricultural land is exempt from annual
real estate taxes. There is therefore no fiscal cadastre for agricultural land.
2.3.2 Fiscal cadastres
There are two annual taxes on the value of real estate; the non-domestic national business rate
is levied on non-residential property and the council tax falls on residential property. These
taxes require the compilation and maintenance of fiscal cadastres.
Business rates fall on the annual or rental value of non-domestic property. The tax rate is set
each year by central government for England and by the devolved governments in other parts
of the UK. The tax is a hypothecated one with the revenue being used to support local
government. Local authorities collect the tax and remit it centrally and receive a share of the
total tax yield according to their population. This means that their share does not reflect the
amount of tax revenue collected from their area. The formal incidence of the tax is on the
occupier. The tax is based upon the open market value of the property and not the current rent
passing between the tenant and the landlord. The valuation model used to estimate the open
market value assumes that the premises are vacant and to let, are in good repair, are used for
the current and not highest and best use, the tenant is responsible for the usual tenant’s rates
and taxes and bears the cost of repairs, insurance and other expenses to maintain the property,
and that the tenancy is an annual lease. The real situation for any individual property may be
very different from the assumptions in the valuation model, for example the property may
belong to an owner occupier. There is a revaluation every five years which is carried out by
the Valuation Office Agency (VOA), the government’s valuers. They update the fiscal
cadastre by requiring property owners to provide them with details of any alterations and
improvements since the last revaluation, rents, rent reviews, lease terms, outgoings, and
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
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ownership. The VOA therefore has a vast database of comparable evidence from which to
estimate current market rents and thus to assess rateable values. There are approximately 1.7
million business properties. There are a very few exemptions from business rates other than
agricultural land and premises and fish farms, and these include places of public worship, and
parks. There is no exemption for government or local government property, which is taxed on
its open market value. The fiscal cadastre is a public document accessible through the
internet. For most types of property it is possible to see how the VOA has arrived at the tax
valuation.
The council tax is an annual tax on residential property which is based on its open market
capital value. The capital value is estimated by the VOA using evidence from property sales.
Properties are placed in bands which determine the amount of tax rather than the tax being
levied as a percentage of the value. Each local authority sets it own council tax rate and is
responsible for collecting the tax revenue, which forms part of its income. The tax has been
levied since 1993 but there has been no revaluation of the tax during this time. The result is
that the tax is based upon 1991 values which are now seriously out of date. Some properties
ought to be in higher bands than they are currently placed in whilst others ought to be in
lower ones. Not all properties in a band have experienced the same rate of capital growth
since 1991. Moreover, since the tax was never intended to be revalued, the VOA was not
required to maintain up to date records of the features of the property as distinct from an up to
date record of which properties exist. Properties that have been constructed since 1991 have
been added to the fiscal cadastre but at their 1991 values. The government has decided that
revaluation should take place though it has postponed the actual date for political reasons
after a revaluation in Wales revealed that there would be more potential losers than gainers.
There are approximately 23 million domestic properties in England and Wales and the VOA
has been working on how to revalue them using mass appraisal systems with the remote
capture of data about their characteristics. Sources for the latter include the particulars of
properties sold through internet estate agents. One of these, Rightmove, has developed a
proprietary Automatic Valuation Method for valuing residential property using its database.
This system is currently sold to estate agents, valuers, and mortgage banks and its data is
expected to be one of the sources used by VOA when council tax revaluation finally takes
place.
The fiscal cadastres for business rates and the council tax together with the Rural Land
Register include almost all properties with a few minor exceptions such as places of public
worship. Whilst the RLR has of necessity to include geo-co-ordinates as payments to farmers
are based upon land area, both the tax cadastres use a general boundaries approach. The value
of properties in many cases will be more influenced by characteristics of the property and its
usable economic area than by its precise footprint. The geo-co-ordinates of the boundaries are
likely to be of a lower order of significance when it comes to estimating the open market
value than the characteristics of the property. It is possible to make changes within a
building’s footprint that can have significant implications for value without there being any
change to the boundaries, for example the construction of a mezzanine floor in a retail
warehouse.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
11/16
A tradition in UK real estate taxes is that the tax liability falls on the occupier and not the
owner. This is for pragmatic reasons. It is often difficult to trace the beneficial ownership of
property where it can be hidden behind layers of nominee holdings. Owners may reside
outside the jurisdiction of the courts making sanctions against them difficult to enforce. By
contrast, the occupier lives or runs a business from the property. In the event of non-payment
of taxes it is possible to distrain upon the occupier and seize his moveable property to sell to
satisfy the tax debt. A tenant may be able to shift the effective tax burden on to his landlord
by negotiating a lower rent so although the formal (legal) incidence of the tax is on the
occupier, the real impact may be on others. The implication of taxing the occupier is that
British fiscal cadastres are records of occupation and not of ownership. Similarly the Rural
Land Register records the person who is entitled to receive the subsidy on agricultural land,
not who owns it. The fiscal and agricultural land cadastres are therefore only partial records
of interests in real estate although almost every parcel should be entered on one or other of
them.
3. THE EFFICIENCY OF THE UK PROPERTY MARKET
Does the absence of a cadastre cause problems for the British property market? There is little
evidence to suggest that it does. It is one of the most open and active in the world and has
proved to be an attractive destination for investment from many parts of the world. Jones
Lang LaSalle (2006) in its Real Estate Transparency Index places the UK in 5
th
position out
of 56 countries surveyed in terms of market transparency behind Australia, USA, New
Zealand, and Canada. It is one of 10 countries placed in the top tier using as criteria the
availability of data about investment performance and market fundamentals, financial
disclosure and governance of listed vehicles, regulatory and legal factors, and professional
and ethical standards. The UK scores highly for rule of law in both the World Bank and
Institute of Economic Freedom surveys suggesting that property rights enjoy a high level of
protection.
The UK has a relatively high level of dependence upon real estate taxes with 11% of net tax
revenues come from taxes on the value of real estate, which is approximately 4% of the Gross
Domestic Product (calculated from HM Treasury 2008). Business rates and the council tax,
which are annual taxes on the value of non-domestic and residential property respectively,
produced 4.3% and 4.6% of net tax revenue in 2006/07. The absence of a general cadastre
does not seem to present problems in creating and maintaining fiscal cadastres for tax
purposes.
The UK has a very highly developed mortgage market.. At 83.4% (2006) it has one of the
highest levels of residential mortgage debt relative to its gross domestic product in the
European Union as figure 1 shows. Mortgage equity withdrawal is a key feature of the UK
economy. Households are able to remortgage their properties in order to release rises in their
value. The sums released can be used for consumption or investment. Between 1979 and
1999 mortgage equity withdrawal in the UK averaged 3% of household disposable income.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
12/16
By contrast in Germany, France and Italy the average injection into housing average 6% of
household income (HM Treasury 2003). Companies also use their real estate as security to
raise capital. This can be by commercial mortgages but also using other forms of loan secured
against real estate assets, such as debenture stock and financial leases. The value of company
shares tends to reflect the value of the underlying assets. Companies also use equity
withdrawal to generate investment funds. The absence of a cadastre does not appear to limit
the workings of the mortgage market or the ability of companies or households to use real
estate assets to raise capital secured against these. The liberalisation of the mortgage market
in the 1980s has made the market extremely competitive. The UK has a highly developed
property valuation infrastructure that enables lenders to have a high degree of confidence in
the value of the assets against which loans are secured. The Royal Institution of Chartered
Surveyors has emerged as the single professional body for valuers. Whilst there is no legal
restriction on non-members calling themselves valuers or offering valuation services, the
financial institutions are unwilling to accept valuations from non-members. The RICS sets
standards for entry to the profession and continuing professional development. It also sets
professional and ethical standards and enforces them. It sets valuation standards which are
enforced through inspections of samples of valuations. The number of professionally
qualified valuers is high in the UK. In the UK there is approximately one qualified valuer for
every 2000 persons. By contrast for Romania it is estimated at 1:8,000 and in Hungary
1:18,000.
Figure 1 Residential Mortgage Debt as a percentage of the Gross Domestic Product in
the European Union, 2006
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Denmark
Netherlands
UK
Ireland
Portugal
Spain
Sweden
Germany
Finland
Belgium
Malta
Luxembourg
Estonia
France
Greece
Latvia
Austria
Cyprus
Italy
Lithuania
Hungary
Slovakia
Poland
Czech Republic
Bulgaria
Slovenia
Romania
Source: European Mortgage Federation (2007)
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
13/16
The UK also has a relatively high level of housing transactions compared to other European
countries as figure 2 shows. At 8.4% this is higher than any of the other economies for which
data was obtained. Again, the absence of a cadastre does not seem to undermine the
efficiency of the housing market. Of course a cadastre could improve the efficiency of the
property market but the market is already an efficient one with a high level of openness and
transparency and relatively low transactions costs (excluding taxation of transfers).
Figure 2 Housing transactions as percentage of owner occupied housing stock, 2000
01234 56789
UK
Germany
Franc e
Ita ly
Netherlands
Denmark
Finland
Portugal
Ir eland
Sw eden
Belgium
Percentage
Source: HM Treasury (2003)
4. IS A CADASTRE NECESSARY?
From time to time individuals have argued that Britain needs a cadastre. For example, in the
1836 R K Dawson, a Royal Engineers officer on secondment to the Tithe Commission to
organise the tithe surveys put forward a well-argued case for a cadastre and how it might be
accomplished (Kain & Prince 1985, chapter 3). Tithes are a tax on the produce of real estate
used to support the Church of England on a parish by parish basis. Under the Tithe
Commutation Act 1836 tithes in kind were replaced by a fluctuating money payment. This
required the determination of the boundaries for each parish or district for which tithes were
payable. It also required the tithe payment to be apportioned between landed estates
according the value of the produce they produced. This meant that most parishes in England
and Wales had to be mapped on a large scale so that legal boundaries were recorded and
areas measured and the land valued. Dawson used civilian surveyors for this task and
produced detailed instructions for them and carried out quality checks on their work. He
argued that this work could become the basis for a cadastre and that Britain should follow
continental practice in this respect. In particular he argued that this would lead to a reduction
in boundary disputes and make for easier transfer of real estate. However, there was strong
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
14/16
political opposition to the proposal to such an extent that the legislation was amended to
prevent the tithe surveys for being used in this way. Dawson lost the power to determine the
scale of the plans produced and to control the level of accuracy.
In 1909 a radical Liberal government introduced a tax of 20% on the increase in value of land
between 1909 and the date on which it was sold, a long lease granted or on the death of the
owner (Short 1997). The legislation provoked a constitutional crisis that pitted the elected
House of Commons against the hereditary House of Lords, which resulted in the latter losing
many of its powers. Implementing it required the government to draw up a fiscal cadastre on
a parcel by parcel basis identifying the ownership of each area using Ordnance Survey maps
for this purpose. The government had to create a valuation service to do this that eventually
became the Valuation Office Agency. The opposition to the tax was so great that the tax was
never collected and no other use was made of the cadastral data assembled.
Any government now seeking to introduce a cadastre would be faced with a difficult task of
persuading the public that one was necessary. It would be an immensely expensive
undertaking. The efficiency of the property market and the high normal level of transactions
would suggest that a cadastre would add limited value and that would be unlikely to justify
the cost. Greater certainty over boundaries than the current general boundaries doctrine
supported by common law rules and adverse possession would in a limited number cases
increase the security of property rights. However, the UK is a country in which property
rights are strongly protected and the rule of law prevails. It has a strong infrastructure to
support the workings of the property market, including an efficient land registration system, a
high level of market transparency, well-developed valuations, a liberal but regulated finance
market, good standards of corporate governance, and a high level of professional and ethical
standards amongst the lawyers and valuers working in the property market enforced by
professional bodies. A cadastre can help reinforce these human and regulatory supports for
the property market but is not a substitute for them.
Land tenure is essentially a social phenomenon comprising “rules invented by society to
regulate behaviour” (UN FAO 2002). Property “is not a thing but a power relationship – a
relationship of social and legal legitimacy existing between a person and a valued resource”
(Gray & Gray 2005). It legitimises access to land and natural resources by individuals and
groups and provides the validation by society of claims to land and land rights. The social
legitimisation of land rights means that tenurial systems reflect the social structures of
different societies, together with their norms, values, and belief systems, and the shared
experiences of the society. At the heart of the absence of a cadastre lies a philosophy of how
land rights were derived and are legitimised in British society and the role of the state in this.
The feudal theory was that tenants-in-chief held their land from the monarch. Inferior tenants
held their land in turn from the tenants-in-chief. Once sub-infeudation was prohibited so that
land could only be disposed of by sale, gift, or bequest rather than the creation of a new
inferior tenant, the complex chain of inferior tenancies became eroded over time. The 1925
legislation removed the last elements of this as well as making copyholders into freeholders.
Therefore the latter no longer held their land from a lord of the manor. Instead, in effect, all
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
15/16
freeholders became tenants-in-chief and hold their land direct from the monarch. Thus, land
owners in England came to hold land immediately of the monarch and not mediately (via an
intermediate lord) as before. Does the ultimate ownership of the land lie with the crown with rights
and boundaries granted by the state? A modern fiction did develop that made such claims in the
seventeenth and eighteenth centuries. The medieval monarchs drew a clear distinction between their
personal land – the demesne land – and other land in their realm. Rather the crown had territorial
sovereignty over the land which ultimately in the absence of heirs would revert to it to be reallocated.
But this is not proprietary title and provides no beneficial ownership to the crown. These ideas have
been tested in modern courts in aboriginal land claim cases, such as Mabo and others v Queensland
(No2) (1992) where the decisions have been that the British crown acquired sovereignty over the land
but this did not extinguish existing aboriginal tenures. The implication of this is that the government
can register land rights but does not determine them. Boundaries are just one aspect of property rights.
The government does not have the right to require property owners to seek its permission to change
them, or to subdivide land or join it together. Parliament is sovereign and could change this position
through legislation. Gaining the necessary public support for doing so from a skeptical electorate
would be quite another matter.
REFERENCES
de Soto H (2000) The Mystery of Capital: Why Capitalism Triumphs in the West and Fails
Everywhere Else, Black Swan, London
European Mortgage Federation (2007) Hypostat 2006: A Review of Europe’s Mortgage and
Housing Markets, EMF
United Nations Food & Agriculture Organization (2002) Land tenure and rural development,
FAO Land Tenure Studies 3, Rome
FAO (2006) European Union accession and land tenure data in Central and Eastern Europe,
Food and Agriculture Organization of the United Nations, Rome
Jones Lange LaSalle (2006) Real Estate Transparency Index, Jones Lange LaSalle LP,
Chicago
HM Land Registry (2007) Land Registry Annual Report and Accounts 2006/7, House of
Commons HC 764, 18 July 2007, The Stationery Office, London
HM Treasury (2003) Housing, Consumption and EMU: EMU study, The Stationery Office,
London
HM Treasury (2008) Budget 2008 – Stability and Opportunity: building a strong sustainable
future; Economic and Fiscal Strategy Report and Financial Statement and Budget Report,
House of Commons HC 388, 12 March 2008, The Stationery Office, London
Kain R J P & Prince H C (1985) The Tithe Surveys of England and Wales, Cambridge
University Press, Cambridge
NAO (2006) Department for Environment, Food and Rural Affairs and Rural Payments
Agency: The Delays in Administering the 2005 Single Payment Scheme for England, UK
National Audit Office, Report by the Comptroller and Auditor General, House of Commons
HC 1631 Session 2005-2006, 18 October 2006
Short B (1997) Land and Society in Edwardian Britain, Cambridge University Press,
Cambridge
The website address for HM Land Registry is www.landregistry.gov.uk. This contains annual
reports, guidance, and the sample documents.
Session 7 – Interesting Matters and Application of Technology in Cadastre
Richard Grover
Why the United Kingdom does not have a cadastre – and does it matter?
Annual Meeting 2008
FIG Commission 7
Verona, Italy, September 11-15, 2008
16/16
BIOGRAPHICAL NOTES
Richard Grover is an economist and chartered surveyor. He is currently Principal Lecturer in
Economics and Investment Appraisal at Oxford Brookes University and was formerly
Assistant Dean of the School of Built Environment at Oxford Brookes University. He has
undertaken a number of projects on the newly emerging private land markets in Eastern
Europe, particularly in Bulgaria, Romania, and Russia, for a variety of clients including the
World Bank and the Food and Agriculture Organization of the United Nations. He is the UK
representative on FIG Commission 7.
CONTACTS
Richard Grover
Department of Real Estate & Construction
School of Built Environment
Oxford Brookes University
Gipsy Lane
Oxford OX3 0BP
United Kingdom
Tel +44 (0)1865 483488
Web: www.brookes.ac.uk
