A cross-industry group has advised approximately 250 companies to suspend investment in digital identity systems for property transactions following a parliamentary committee’s critical assessment of the government’s digital ID plans.
MyIdentity, established with public funding to develop a digital identity trust framework for residential property transactions, issued the warning after the committee published its report ‘Mandatory to manageable: the government’s plans for digital ID’.
The report concluded that “weak policy development and a rush to announce left plans for mandatory digital ID doomed to fail and destroyed public confidence from the outset”.
Withdrawal of industry support
MyIdentity and the Home Builders Federation have met officials from the Department for Science, Innovation and Technology (DSIT), the Ministry of Housing, Communities and Local Government (MHCLG) and the Digital Property Market Steering Group (DPMSG) to inform them they could no longer support current initiatives.
The group stated that conflicting views across government departments, regulators and industry bodies have created uncertainty about how digital identity will be implemented in property transactions, leaving firms legally exposed.
The parliamentary report was published seven days after the King’s Speech reaffirmed the government’s commitment to digital identity. It criticised ministers for failing to articulate a compelling case for digital ID and highlighted concerns over policy development and implementation.
Framework development
MyIdentity’s framework was developed with DSIT involvement and input from 106 organisations, including five government departments, regulators and industry trade bodies. The investment warning affects a sector that has seen ongoing changes to transaction processes and increasing digitisation efforts.
The uncertainty around digital ID implementation comes as property companies navigate broader market challenges, with some firms pursuing consolidation strategies amid regulatory and technological shifts.
The suspension of investment affects companies across the residential property transaction chain, from estate agents to conveyancers, who had been preparing systems for digital identity verification. The group has not provided a timeline for when confidence might be restored in the government’s approach.
