Conveyancing: Fees rising this year
Conveyancing fees are down by over a fifth in real terms from the peaks seen during the stamp duty holiday as the market has cooled, according to new research.
However, there was a significant increase in average fees for buyers and sellers in the first quarter of this year, compared to the previous quarter.
Researchers from Reallymoving, which provides instant property quotes, found that the average combined cost of conveyancing, including purchase and sale fees and both sets of disbursements, increased by 5.1% in the first quarter of this year from £2,055 to £2,159 (including VAT).
Average fees for buyers went up from £902 to £950, and for sellers from £718 to £764. Average disbursements and expenses, not including stamp duty land tax, stayed virtually the same at £398 for buyers, but went up for sellers from £34 to £48.
This compares to a peak of £1,076 for purchasers’ fees in the third quarter of last year, and £769 for sellers in the second quarter.
Its new Conveyancing Costs Index said that, when adjusted for inflation, fees had now dropped back to only 3% above pre-pandemic levels and were 22% below the average for the stamp duty holiday.
The largest increases in fees in the first quarter of this year were in the South-East (7.8%), the East of England (6%), the South-West (5.7%) and London (5.4%).
Rob Houghton, co-founder and CEO of Reallymoving, commented: “Due to falling demand, the conveyancing industry has been unable to maintain the price increases we saw during and immediately after the pandemic stamp duty holiday, when a significant uplift in home mover activity drove conveyancing costs up to what many have argued is a fairer and more sustainable level.
“Since then, fees have fallen by about 5% but high inflation has eroded their true value much further and in real terms they are now only about 3% higher than pre-pandemic levels.
“Conveyancing costs have risen in the first quarter of this year, but volumes remain lower than the long-term average and there is still a long way to go before fees are back to the level we saw during 2021-22 in real terms.”
Separately, research by Property Solvers, which facilitates quick property sales, found that average residential conveyancing fees for a freehold tenured property sale and purchase in early 2024 stood at £1,187.98 and £1,265.65 respectively (inclusive of VAT), increases of 6% and 7% respectively compared to a year ago.
It approached 100 conveyancing firms for direct quotes on transactions involving a mortgage being redeemed or used to buy. Property values in the quote request never exceeded £300,000.
After what Property Solvers said were “rather aggressive price hikes” between 2022 and 2023, average conveyancing costs for a leasehold property sale saw somewhat subdued increases, with sales and purchases up 4% to £1,401.99 and £1,491.83 respectively.
Remortgaging costs, based on a secured home loan of £225,000 (75% loan to value on £300,000), saw an average cost rise of 7.7% to £692.92; leasehold supplementary costs tend to lie at between £200 and £350.
Ruban Selvanayagam of Property Solvers said: “Continued inflationary pressures on wages and other overheads involved in running conveyancing practices continue to drive fees upwards – albeit at a slower pace than in recent years.
“We were coming across quotes going well into the £2,000s for freehold sales / purchases and nearly reaching £3,000 for leasehold property purchases – often reflective of the firms’ well-established reputation and their ability to process transactions quicker.
“However, we continue to discourage sellers and buyers from using conveyancers with pricing that appears to be unusually inexpensive. Whilst more conveyancers are embracing AI and other streamlined process, you’ll often find that the ‘low fee’ firms tend to be overloaded with cases – resulting in an inferior quality of service.”
Last week, the levelling up, housing and communities select committee announced that its new inquiry on improving the home buying and selling process in England will look at the role of referral fees in the conveyancing process.
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