According to Search Acuman’s Conveyancing Market Tracker quarter three statistics, active conveyancing firms operating in England and Wales have fallen to their lowest levels since records began in 2011.
In particular, the number of smaller conveyancing firms that are able to process and complete up to twenty-five cases per month have dropped by 10% in the last five years.
In comparison, larger conveyancing firms that are able to handle over fifty cases per month have increased by a third in the same time frame.
However, the 4,191 operating conveyancing firms in 2017 have reduced by 2% to 4,100 in recent months. This is a continuing trend that has seen over 700 firms vanish from the property market through closures, take overs, acquisitions and mergers since 2011.
Although the firm average of 60 completed transactions per month is flat on the statistics last year, this is a 20% increase from statistics five years ago, highlighting the increased volume despite the falling number of active firms.
The plight of the smaller firms dominates the figures as firms outside the top 1,000 have only enjoyed 9% growth compared with the market average of 20%.
Andrew Lloyd, Managing Director of Search Acumen, comments: “Over much of this decade, we have witnessed a clear consolidation of conveyancing business at the top end of the market. Technology has been a big driver in allowing smarter firms to steal a march on their rivals, which in turn means that the smaller, local conveyancers have struggled as market consolidation bites. They have seen their margins squeezed, local business networks shrink and opportunities to find new business diminished.
“In contrast, larger firms have been able to take advantage of market consolidation as more cases come their way. They have geared up their businesses and continued to grow over the last five years even as the market’s growth has slowed from the heady days of 2014-2016. Others have seized the opportunity to enter the fray for the first time with new propositions or aligned themselves with former rivals through mergers to stem the tide.
“The wider political and economic landscape means the shape of things to come in terms of transaction volumes is to some extent still anyone’s guess as we approach the end of the year. What is clear though is that conveyancing consolidation looks set to continue. The task ahead for the established leaders and aspirational ‘challenger’ firms is have a clear plan to prosper in the face of a potential weakening market. They cannot simply rely on transaction volumes increasing year-on-year, so will have to work smarter and deliver better, faster and more transparent services to give customers an incentive to pick them out of the crowd.”
Why are conveyancing firms leaving the market? What could be done to increase the market growth of smaller firms?