The pilot will involve live property transactions with selected mortgage broking firms, estate agents, conveyancers and solicitors in Cheltenham, Gloucester, Harrogate, York and West London.
It is expected to run for about a year with firms in more regions becoming involved in spring 2022.
The aim is to establish online platform MyIdentity as a trusted portal where buyers and sellers can verify their identity digitally a single time to cover the whole of the buying or selling process.
Individuals currently prove their identity on average five times to numerous organisations throughout the transaction chain when buying or selling a property.
The system would also help to reduce mortgage fraud. One element of the pilot will be to help steer third-party digital identity service providers through the process of getting certified in line with anti-money laundering rules.
Etive, the technology provider and project lead for the pilot, has worked with commercial operators, trade associations and regulators to develop the scope.
Kate Davies, executive director at the Intermediary Mortgage Lenders Association (IMLA), one of the bodies affiliated to the project, said: “It’s designed to test out the one-stop digital identity initiative, to see what works and what doesn’t. Security is a challenge for solicitors, conveyancers and those with multiple legal and regulatory requirements to fulfil, and it is not always possible to rely on third parties to carry out these on your behalf, unless systems are water-tight. The point of the pilot is to identify any possible leaks and to fix them.”
Also affiliated are the Association of Mortgage Intermediaries, Building Societies Association, Conveyancers Association, Home Builders Federation, Propertymark, RICS and UK Finance, among others.
The Digital Identity Trust Scheme for the Home Buying and Selling Sector is one of six which are aiming to achieve a similar outcome in different sectors. The idea is for them all eventually to be interoperable.
The aim will be for the six to fit within the wider UK Digital ID Trust Framework, which is in development by the Department for Culture, Media and Sport. Legislation is currently slated to come forward in 2023.
Stuart Young, director at Etive, said: “It’s great to see the industry come together to improve such an important aspect of the home buying and selling process.”
Christopher Pincher, Conservative MP for Tamworth, and housing minister, said: “A single check which can be relied upon by multiple parties will help us to deliver a modernised home buying experience.”