What Does Possessory Title Mean?

If you’re a homeowner or a potential homebuyer who has recently encountered the concept of a possessory title, I can appreciate it’s probably raised a lot of questions. Having been a fully qualified solicitor since 2016, I have covered a wide spectrum of property law, including property disputes and litigation. In my experience, a possessory title can crop up from time to time when homeowners are disputing elements like land boundaries and missing title deeds. 

As you can imagine, navigating these situations can be quite tricky, but not impossible. Only having a possessory title certainly comes with its fair share of risks, which we’ll get into very shortly. As a result of these risks, possessory titles can negatively affect property value. However, if you own property or are looking at property with one of these titles, it’s not necessarily a deal breaker.  

There are ways around the situation. This applies if you’re a homeowner looking to make your ownership more secure or if you’re a buyer looking for more peace of mind in your purchase. 

I’ve written this article first and foremost to provide you with accurate and up-to-date information about possessory titles. Any legal information you see on this page has been supported by official documentation, either from the UK Government or legal sources. 

I also want to provide some advice on what you can do to strengthen your ownership over a property without an absolute title. Once we’ve covered all that, I’m going to break down how you might go about selling a house with a possessory title without it affecting your value so much. 

First of all, let’s take a look at what possessory title means.

Table of Contents

• What is a possessory title?

• What is adverse possession?

• When a possessory title might be deemed necessary

• What are title deeds and are they necessary?

• Possessory title vs absolute title

• Common risks of having a possessory title

• How do you check a property’s title?

• How much does a possessory title affect the value of your property?

• Why does a possessory title affect property value?

• Can you build or develop on land with a possessory title?

• Can you sell a house with a possessory title?

• How to make a possessory title more appealing to buyers

• How to sell property with a possessory title

What is a possessory title?

A possessory title is a form of deed given by HM Land Registry granting a person or persons property ownership. According to the UK Government, possessory titles are rare and may only be given when there isn’t sufficient evidence for an absolute title. The official guidance also states that you might be granted a possessory title if you’ve come into possession of the land or property via adverse possession. 

What this essentially breaks down to is that you’re officially registered by the UK Government as the owner of the land, but you don’t have complete legal security over this ownership. Technically, someone with a stronger claim to the land could take it away from you. 

Here’s a quick and very basic example: 

You’ve been given a possessory title for your land because the original title deed no longer exists. You live on the land for 10 years until someone comes forward with the original title deed stating that they are, in fact, the true owner of the land. If that deed is deemed legitimate, they could take that land away from you.

What is adverse possession?

Adverse possession is essentially squatter’s rights. In the UK, you can apply for adverse possession if you can prove that you’ve possessed the registered land as an owner might for at least 10 years (12 years for unregistered land) before the application. This is based off laws outlined in the Land Registration Act 2002. You must also be able to prove that you have intention to possess the land. So for instance, you can’t just be using it as an access point to your property. Finally, you have to show that you’ve possess the land without the owner’s consent. So this means you’ve done it without any legal title being involved or even with the owner’s (if there is one) knowledge. 

You can learn more about adverse possession and how to apply by reading the UK Government’s official guidance.

When a possessory title might be deemed necessary

You or someone else might find themselves in possession of property without complete evidence of ownership for numerous reasons. Here are some examples of when a possessory title might be needed: 

1. The original title deeds have been lost or destroyed (e.g. in a fire or flood).

2. The property has been passed down through the family over generations and the absolute title no longer exists. 

3. You’ve occupied the land long enough without the owner’s permission to obtain adverse possession. 

4. You’re registering land for the first time and don’t have any title deeds.

5. The property was registered but that registration was incomplete or contained errors, so it can no longer be used. 

6. A section of land is being fought over by neighbours and one person can claim adverse possession over it. 

What are title deeds and are they necessary?

Title deeds is the official name given to any paper document that provides evidence of ownership for land and property. These documents will track the ownership history of the land or property, including proof of your ownership.

According to HM Land Registry, title deeds could be anything from conveyancing and sale contracts to mortgages and leases. In the case of inheritance, a title deed may also include someone’s will. All of these can be used to register your title officially with HM Land Registry, which becomes one digital title register that includes details like: 

• Registered owner’s name

• Property description (including land boundaries)

• Title class (e.g. absolute)

• Rights and restrictions

It’s still important to store your title deeds in a safe place even if you have a title register with HM Land Registry. You can always use the official title register to prove your ownership, but the individual documents may be important for specifics. It’s one of those better safe than sorry situations where you really don’t want to be needing them at any point. 

If you don’t have an official registration with HM Land Registry, you’ll need those title deeds to set it up. As we’ve already covered, when those deeds are missing is when a possessory title may be your only option. 

Possessory title vs absolute title

An absolute title is the best possible option for a homeowner. According to HM Land Registry, it’s also the most common title granted. However, they need evidence that guarantees you are absolutely, without a doubt, the owner of the land or property.

A possessory title is given when you don’t have enough evidence to prove you have absolute ownership. The biggest difference here is that you don’t have as much legal protection over your ownership as an absolute title. Having your ownership challenged by another person is just one of the many risks that come with a possessory title.

Common risks of having a possessory title

This kind of title deed carries risks that an absolute title doesn’t have. They can make life very difficult if they ever crop up during your ownership.

How do you check a property’s title?  

You can check with title a property has, as an owner or buyer, through HM Land Registry. You just search their comprehensive digital register for a small fee of £7 per property. This should give you clear details on the title number and type, its owner, and the general boundaries. You’ll just need the property’s address or postcode. Or the title number if you already know it.

How much does a possessory title affect the value of your property? 

Having a possessory title instead of an absolute title can reduce the value of your property. However, how much it affects the value depends on a number of factors. If I was to give you an estimate, it would be about a 15-20% reduction in value, but it may be less or more in your situation. 

1. Duration of ownership

Have you owned the property with a possessory title for 10-12 years or close to this length? If so, the title may already be eligible to be upgraded to an absolute title. Or at the very least, close to eligibility. This will usually be seen as less risky to buyers, but there’s still a risk for those remaining years. There is also the time and money they’ll need to spend upgrading the title themselves. 

2. Supporting evidence of ownership

Do you have any additional evidence that can support your claims to ownership? Documents like statutory declarations, signed agreements from previous owners or a will from whoever you’ve inherited the property from can help support your claims of ownership. Knowing they have substantial evidence to refute anyone else’s claim to ownership may ease a buyer’s mind.

3. Your insurance

If you have solid indemnity insurance to protect ownership over the property, it might make your property more marketable. Buyers will often see this as a positive and the value may drop less as a result. 

4. Reason for the title

Some possessory titles are more attractive than others. For instance, if you have gained your title through adverse possession, there’s going to be more risk than if the title deed has been lost or destroyed. Adverse possession can be overruled by someone coming forward with stronger evidence or the actual deed. 

Why does a possessory title affect property value? 

Ultimately, there’s a level of uncertainty involved when buying property with a possessory title, which can make it harder to sell these properties on the open market. It can also be more difficult for buyers to get a mortgage loan, as lenders may deem the risk too high. This is reflected in the UK Finance Mortgage Lenders’ Handbook for Conveyancers, which states:

It may be possible for you as the homeowner to provide enough evidence to make a mortgage lender consider these risks reduced enough to approve a loan. However, this isn’t always possible. It’s because of these risks and difficulties that some homeowners with property in a possessory title choose to sell through auction or to a professional cash buyer.

Can you build or develop on land with a possessory title? 

If you have a possessory title, you are entitled to build or develop on the land, according to Bonallack & Bishop Solicitors. However, I would recommend always going through a solicitor just in case, as your situation may be different to others. You can technically apply for planning permission without one, but going through the right legal channels can make the process smoother. 

Can you sell a house with a possessory title?

Yes, absolutely. There’s nothing stopping you from selling your house if it has a possessory title. You may just find the process longer and more difficult than someone selling a house with an absolute title.

A 2012 message on the Money Saving Expert forum by homeowner Katherine highlighted the difficulty in selling a house with a possessory title. Katherine’s possessory title was granted due to there being no official title deed after the home’s original and sole owner (her grandma) passed away.

“We got the probate solicitor to put us down at first registration in 2006 and was given possessory title,” Katherine wrote. “We tried to sell the house two years later, but on two occasions the sale fell through as the other sides’ solicitors advised against purchase.”

Although it can be difficult and frustrating, there are ways to get around this situation and even make greater profit from the sale. This mostly involves finding ways to improve the marketability of your property.

How to make a possessory title more appealing to buyers

Traditional buyers are going to approach a possessory title with more caution than say auction houses or cash buyers. If you’re set on testing the open market, I want to make sure you’ve done everything possible to get the best result. Here are the ways I would recommend you improve the marketability of your property.

1. Get indemnity insurance

Indemnity insurance offers a greater level of protection to your possessory title, addressing some of the risks while reducing others. It’s important to note that indemnity insurance doesn’t stop you from losing the property or land if someone else’s claim to ownership is successful, according to many solicitor guidance online, including this one from Lawsure Insurance Brokers. However, it can provide: 

• Cover of legal expenses incurred contesting someone else’s claim to the property.

• Compensation for any financial losses, including the property, if someone else is successful with their claim. 

• Compensation for a decrease in property value. 

• Cover of expenses incurred if you need to make court-ordered changes to your property as a result of having a possessory title. 

It’s also very valuable to have when approaching mortgage lenders, as they may be more open to granting a loan knowing the insurance is in place. This peace of mind applies to potential buyers as well. 

Indemnity insurance isn’t cheap. According to Bonallack & Bishop Solicitors, it can cost anywhere from £300 to £500. It can sometimes cost more, depending on the value of the property. 

Your possessory title also might not be entitled to indemnity insurance, depending on its specific circumstances. For instance, you can’t take out insurance if there’s an existing dispute over ownership. 

One homeowner on the Money Saving Expert forum highlighted how the sellers of their eventual property bought indemnity insurance to protect the buyers. This seemed to be a big reason why the sale went through.

“I bought a house that was already held by possessory title from sellers who had only lived there for six years. The sellers bought the indemnity policy to protect us for the sale to proceed. We actually did live there for more than 12 years, but no one ever claimed ownership during the time we lived there and the property was upgraded to absolute title before we sold.”

2. Solidify your ownership claims with solid paperwork

You can help ease a buyer’s mind by providing them with additional paperwork to support your possessory title. This documentation could be signed statements from previous owners or a will stating the property belongs to you. If you have anything you think could be used to further solidify the buyer’s claim to ownership, make sure you provide it. 

3. Promote the length of your ownership

It never hurts to remind the buyer of how long you’ve owned the property if it’s been for a significant time period. The closer to 12 years the better, as they’ll be able to upgrade the title to absolute after this point. 

I should be clear, both owners (you and the buyer) do not need to have a possessory title for 12 years. It’s 12 years from the date of registration, according to Land Registry. So it could be the case you’ve had the title for 10 years. If so, it’s worth making it clear to the buyer that they only need to wait another two years before upgrading. 

4. Upgrade to an absolute title (if possible)

Have you already had the possessory title for 12 years or more? If so, it’s in your best interest to upgrade to an absolute title. You can do this by submitting form UT1 to HM Land Registry. Just make sure you include any evidence that proves the possessory title has been held for at least 12 years. You will need to pay a fixed fee and the decision is not guaranteed, according to the UK Government. However, if you can show buyers the property has an absolute title, your market value will return to 100%.  

5. Consider approaching different buyers

You might not successfully sell a house with a possessory title to traditional buyers. If you’ve had your property on the market for a while, it might be time to approach different buyers. Consider going through an auction, where you might have access to property investors or specialist buyers. 

You can also sell your property to a professional cash buyer, such as The Property Buying Company. You may only get 75-85% of your market value, but the sale process usually takes 2-3 weeks and is sometimes as fast as seven days. I recommend you learn more about how a cash buyer works before you get in contact.  

How to sell property with a possessory title

If you want to sell property fast and you’re struggling to find buyers because of the possessory title, I recommend researching cash house buyers. I know, this option may seem a little biased, but you can honestly find legitimate and good cash buyers who want to help and are willing to spend a lot of money on valuable property. Take a look at this guide on the best quick house sale companies to kick things off. It will give you a better idea of your options. 

You want to choose a company that offers expertise and transparency, usually one that’s a member of the National Association of Property Buyers. The top cash buyers also cover all your fees during the process, including solicitor and survey fees. If you choose a good cash buyer, you could sell your house in weeks, not months, and move on from the stress and fatigue that often results from long sale times. 

I’ve worked with The Property Buying Company for many years now and can attest to their honesty, professionalism and reliability. They have spent almost over £88 million on property around the UK without costing any of those sellers a single pence.