Written by Howard Bailey, a commercial property Solicitor at Spire Solicitors LLP.
This time last year I didn’t think I would be writing a column about using bitcoin for buying and selling properties. The thought of cutting banks out of the conveyancing transaction seems unfeasible, however in December 2017 two new build homes in Essex became the first UK properties to be purchased using bitcoin currency. Since then a few other properties have been listed for sale only in bitcoin and although this is still a very small number, this shift may signify changes for how we will buy and sell properties in the future.
For those who don’t know, bitcoin was launched in 2009 and is a type of cryptocurrency that enables users to make transactions without going through a bank. Bitcoins are used to carry out anonymous digital purchases or transfers, and every transfer or purchase is logged digitally. Cryptocurrency has previously been used for fairly low value transactions, however over the past few months; there has been a rise in people looking to sell their homes for bitcoins rather than cash. In December 2017, the Land Registry also confirmed its willingness to record the property sales completing in bitcoin.
The main advantage of using bitcoin is that transactions don’t involve a financial institution and money can be transferred instantaneously. There are risks to consider and although bitcoin has seen significant growth, its value is still extremely volatile. By accepting payment via bitcoin you run the risk that its value could drop overnight. Therefore, given the length of the property selling process in the UK, there is a high chance you could be left out of pocket by the time the sale goes through. Due to this volatility, exchange and completion has to happen simultaneously, which speeds up the process for both the buyer and seller.
The nature of the cryptocurrency will also create some hurdles within the legal profession and in particular with efforts to prevent money laundering. That being said, our learned colleagues in Essex have already worked their way through (presumably) the required verifications steps, and we at Spire Solicitors LLP are in the midst of the process now and we are very much open minded about the challenge.
If you would like to discuss this further, please contact Spire Solicitors LLP on 01603 677077 for all your legal needs.