Posted by Ryan Sparrow, digital content specialist at Legal Futures Associate Access Legal
Sparrow: Huge polarisation in conveyancing market
Last year saw significant headwinds for the conveyancing market, with falling transaction volumes and rising interest rates. But what does it mean for conveyancers and what opportunities lie ahead?
Conveyancing practice
There was a big drop in transaction volumes in 2023 compared to the previous year, which itself saw a big drop in numbers from the peak of 2021, where the end of the stamp duty land tax holiday saw volumes spike enormously.
This year-on-year fall is set against a backdrop of difficult economic circumstances. Inflation was at levels not seen in decades, so too were interest rates, while house price growth slowed and eventually decreased.
But we also saw change in the legal market. While purchase volumes decreased, so too did the number of active conveyancing firms, with a fall of 9% compared to 2022, which was seen across all regions of England and Wales.
Interestingly, the number of firms completing fewer than 100 transactions increased slightly, while those completing more than 100 fell sharply.
The number of firms completing 101-500 transactions fell by 13% and 501-1500 transactions by 29%, while there was a 35% slump in those completing more than 1,500.
This has seen a huge polarisation in the market, with the biggest firms far exceeding the numbers of those below them.
Client impact
While transaction volumes have gone down, efficiency levels have gone up, with post-completion work on average being completed one week earlier, so it’s surprising that the number of complaints to the Legal Ombudsman from clients have increased year on year.
Most of these complaints relate to poor communication or delays to the process, both of which saw increased numbers on previous years. This aligns with research carried out by the team at Conveyancing Week, who found that while home movers are largely satisfied with their conveyancing experience, they feel that the process could be improved.
Many thought the process could be quicker, while others said better or more communication with their conveyancer would help.
A number of clients felt that more digital processes could help support the home-buying journey, with around 20% wanting the ability to access their case and complete documents online or have a mobile app telling them when they need to do something.
The research also looked at how clients find their conveyancer, with referrals, from friends or family, from estate agents or from housing developers being the primary source. Online search is growing in popularity, however, having risen from 5% to 14% in the past five years.
Burden of compliance
Things have also changed in the world of compliance when it comes to conveyancing. With increased scrutiny from regulators with regards to anti-money laundering, increased fining powers and new rules and regulations being brought in, such as the Building Safety Act, climate change guidance, and the changes to the Conveyancing Quality Scheme protocol.
All of these changes in the conveyancing market have brought both challenges and opportunities for conveyancing firms, which we analyse in the full report, which you can download for free.
In the report you’ll also find regional profile pages, so you can see performance in your local market and compare to see where you rank.
Leave a Comment