As the housing market shows no sign of slowing down, Aconveyancing’s founder and director Natalie Moore talks about the importance of keeping fees up to meet rising costs and tackle under-cutting.
“With the boom in residential sales and purchases over the last year thanks to the stamp duty freeze, the value of a good conveyancer has never been more important. Across the industry, we have worked tirelessly to help our clients achieve their dreams of buying and selling, often saving them a small fortune and yet our own business costs are on the rise, specifically indemnity insurance, which is only getting more expensive year on year.
We are now experiencing the direct knock-on effects of Covid and Brexit, with a tougher insurance market driving premiums up across the board. Ironically, the busier we are as an industry, the higher premiums get, with insurers concerned about a rise in claims. Either way, we’re snookered because there is no way of avoiding these hefty insurance costs.
Just last month, the CLC announced the closure of at least six conveyancing businesses due to crippling insurance premiums. I’m sure there are other factors involved in the closing of these firms, it’s never clear cut, but insurance shouldn’t be so high that owners can’t afford to pay it, especially when other property related companies (estate agents for example) don’t need this type of cover and often charge more than we do for their services.
As an industry, we have to respond to these growing costs and challenges. Our fees need to reflect the skill and complexity of our job and it’s up to us all to raise the value of our work.
Now is the time to think long-term. As the stamp duty freeze is coming to an end we may all be experiencing a slower summer compared to earlier this year, lowering fees is not the right long-term strategy to protect our industry as a whole. We need to stop undercutting each other. I’m not saying we shouldn’t be competitive but there’s a value to conveyancing that cannot be cheapened because complexity and risk involved in what we do.
I know that’s easier said than done, everyone wants to remain competitive. We all have bills to pay. For many firms with high wages to cover, there is no flexibility within the cashflow to take a few months of lower revenue and that’s an ongoing challenge.
Review the practice of ABS firms
The direct competition we are facing from ABS firms worries me. With fees priced so unrealistically low, it not only cheapens the value of conveyancing, but these firms represent a backwards step for our industry. I’m all for industry progression and offering a wrap-around service often makes sense, but ABS firms (often linked with estate agents) are offering business rates that we shouldn’t even consider competing with – and then delivering a third class service without the skills of an experienced conveyancing team. In the long term everyone loses. Conveyancers lose financially, estate agents lose their reputation and, most importantly, the client loses their faith in the buying and selling process.
Set minimum fees
Innovative, long-term solutions are possible if we work together as an industry to lobby and implement them. For starters, there should be minimum fees set by regulators. This is the only way to improve our service and stop the undercutting from less experienced firms, greedy partners and owners who don’t take into consideration the wellbeing of staff.
Ban referral fees
Referral fees should be banned. We at Aconveyancing have worked to cap referral fees but we still pay out thousands every month. What other business pays a chunk of their profits to anyone other than HMRC?
If we work together to set higher standards, clients will accept that they have to pay more for the service we deliver and when the insurance renewal date comes round for 2022, I am really hoping we don’t see any more colleagues out of a job.
Natalie Moore is Director at AConveyancing
