If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration.
For the purposes of subsection (1), the priority of an interest is protected—
in any case, if the interest—
is a registered charge or the subject of a notice in the register,
falls within any of the paragraphs of Schedule 3, or
appears from the register to be excepted from the effect of registration, and
in the case of a disposition of a leasehold estate, if the burden of the interest is incident to the estate.
Subsection (2)(a)(ii) does not apply to an interest which has been the subject of a notice in the register at any time since the coming into force of this section.
Where the grant of a leasehold estate in land out of a registered estate does not involve a registrable disposition, this section has effect as if—
the grant involved such a disposition, and
the disposition were registered at the time of the grant.