In the last few years the number of UK Conveyancing firms has dropped significantly – where are they, and what does this mean for the market as a whole?
The IRN ‘UK Residential Conveyancing Market Report’ released in November 2023 made for sobering reading. According to its numbers, the number of conveyancing professionals undertaking transactions had fallen by 13% since 2021, with transaction volumes themselves also down by 22% in the first nine months of 2023 compared to the same period the previous year.
While the latter can be explained by the general state of the market under the twin pressures of a cost of living crisis and interest rates still staying relatively high, it begs the question – where are all those conveyancers disappearing to, and what will happen when the market inevitably recovers?
Conveyancing can be a somewhat thankless task. As the lynchpin in a process which involves the co-ordination of many different parties – estate agents, mortgage brokers, local authorities and HMLR to name a few – there is an undeniable sense of herding cats. Factor in the many varied and often archaic systems on which these various parties and indeed the whole conveyancing process also turns, and it becomes appreciably worse. Small wonder then, that fewer people are entering or remaining in the industry.
There’s also the question of mergers. Smaller firms are finding it increasingly difficult to operate in a climate of rising costs and a client expectation of lower fees. Larger, ‘bulk conveyancing’ firms, often with a significant online presence, have contributed to a race for the bottom when it comes to setting fees, and more and more small firms find themselves open to acquisition by larger entities as a consequence. This means not only fewer firms but also a consolidation of resources that can often result in members of staff being let go as they find their previous roles redundant in the new structure.
As to what happens when the market recovers, it’s not as if we haven’t been here before. Look back to 2016 and the market was already looking at increased pressure on conveyancers, with annual case numbers for conveyancers rising from 71 to 120 between 2012 and 2016. Combined with falling numbers in conveyancers this meant that the average conveyancer was completing one more case per week than usual.
Look to even more recent history, and the Stamp Duty holiday that ended in 2021. The surges produced in demand by that incentive ended up creating so much additional pressure on conveyancers that the typical transaction process went from 12-14 weeks to 5 months or more. That increase was partially due to the inability of UK conveyancing’s archaic systems to deal with such a rapid increase in activity, but also to the fact that conveyancer numbers were not equal to the demand. It seems inevitable that sooner or later the interest rates will start to drop, the market will begin to recover and demand will increase, yet those same systems and the continued decline of conveyancer numbers remain, meaning a big problem could be lurking on the horizon.
But is it all doom and gloom? We’d argue not. The opportunities definitely exist for firms to start improving their own circumstances. Increasingly, tech solutions and third party services are gradually helping to streamline the process. In turn, taking those opportunities to improve your offering can allow for a firm to look at more realistic fee structures as they differentiate themselves from the competition in ways other than simply lowering fees. Additionally, such systems can help fee earners to use their time more effectively as they delegate certain mundane functions to support staff or even full automation. For firms able to weather the current circumstances, there may be a wealth of opportunities around the corner.
This article was published by Compass as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
