Are conveyancers prepared for Labour’s home building programme?

Conveyancers must be prepared to manage the additional workload brought by the Labour government’s house building targets as new figures show a continued decrease in the number of firms undertaking conveyancing work in England and Wales.

The warning comes from from property data company Search Acumen whose latest Conveyancing Market Tracker shows a 3% reduction in the number of firms registering a transaction at HM Land Registry in the first six months of this year; a drop of around 130 firms. This follows a general trend over the past ten years, where the number of firms actively undertaking conveyancing work has fallen from 4,317 in 2014 to 3,857 in 2024, a decline of 11%.

Source: Search Acumen analysis of HM Land Registry data

After a challenging first half the year, punctuated by the General Election and the continued anticipation of a reduction in the Bank of England’s base interest rate, commentators are predicting an uplift in transactions for the remainder of the year. Firms are currently operating at lower caseloads than at any time since the pandemic. Transaction volumes in December 2023 were at 56,397; the last time the market was so subdued was September 2020 (53, 166) when caseloads sat around 40.

Analysis suggests that conveyancers have averaged 61 caseloads per quarter in 2024, compared to 74 across the same period in 2023, and 94 at its peak in Q1 2022. The average property law firm has handled 19% fewer cases in the first half of 2024 compared to the same period last year.

The message is stark; with transactions down 22% year on year, a market turnaround will bring significant pressure; albeit at a time when firms might have some flexibility in their workloads.

Despite the consolidation and exits of conveyancing firms, the share of transactional work remains hugely fragmented. The top five firms by volumes have seen their share of caseloads drop to 4% in Q2 2024, down from 5% in Q1 2024; and in a broader trend, down 24% over the course of the last decade, suggesting more work is being won by small to mid-size firms.

And while the Top 200 firms by HM Land Registry volume have seen a 34% increase in their transaction share, the top five are down 9% over the last ten years.

Commenting on the latest tracker research, Managing Director at Search Acumen Andrew Lloyd says

“Lawyers, like other industries, are feeling the pressure to do more with less. Pressure from clients to produce more in the same time frame – to be quicker as well as to serve their firms bottom line – is a balancing act where often technology can be used to expedite the process.

“Whilst the fact that caseloads are dropping may feel like a well-earned reprieve for many after the post-pandemic years, it is also an uncomfortable sign that growth is stagnating in real estate. Some firms are taking a much larger slice of the pie, knowing that when the heat is on, upping their game is essential. The data reflects this and what we know anecdotally, that the mid to large firms are investing in digital transformation and seeing their market share grow as a result.”

Lloyd warns firms who fail to prepare will get left behind if Labour’s house buildings come to fruition, adding

“We know housebuilding has been at historic lows with high ambitions cemented by a new Government to reverse this trend. With housebuilding comes increased investment from both the private and public sectors to support the real estate ecosystem, from retail to social housing. If Labour deliver, we could see a very different picture for transactions this time next year as land deals accelerate.”

“What technology can deliver for businesses’ bottom lines here will be essential. The competition from professional service industries to be the firm of choice will increase as Labour’s housing policies bed in, in which the need to transact quickly, with effective and accurate digital tools, will play a leading role in the race against obsolescence.”