For a long time, the number of conveyancing firms active in the housing market has been on a downward curve. And, after this year, I suspect that will continue to be the case.
To my mind that is no bad thing — conveyancing has become something of a cottage industry, with some firms carrying out only a handful of cases over any given year, and with a lip-service approach to delivering a quality service in this area.
Indeed, what we’ve tended to see — and I put some of this down to advisers becoming more active in the provision of conveyancing advice — is a move away from the conveyancing dabblers; from the local firms, the high-street solicitor or those that have only a part-time conveyancer, to those volume firms that are fully immersed in the sector and can deliver whatever the product sector requires and the client needs.
The market will keep faith with the specialists
Since the introduction of the stamp duty holiday, however, this trend has been reversed. The latest figures from Search Acumen show that 4,024 firms carried out registered transactions in the second quarter (Q2) of this year, reaching levels not seen since Q3 2019.
‘Needs must’
The big question, of course, now rolls on to what may transpire in future quarters, when purchase transaction levels are likely to be nowhere near those achieved in Q2 2021.
During that three-month period, I suspect many clients (and perhaps some advisers) would have been looking for conveyancers to work on cases that ordinarily might not have received their business.
Our advice remains: what is going to be best for the client?
It would have been a case of ‘Needs must’ because, with the volume of work, it was physically impossible for the key volume conveyancing operators to pick up all the extra demand in the marketplace. Indeed, under their own terms they would not have been able to accept work that they believed they were unable to complete in time.
Hence we see such a big jump in active ‘conveyancing firms’; a term I use lightly because a lot of these businesses are not ‘conveyancers’ but have sensed an opportunity for work (and income), and perhaps we should say ‘Good luck’ to them for that.
To what extent they will stay active in the conveyancing space is unknown, however. Perhaps Q3 2021 will be slightly skewed because again we have the partial stamp duty holiday, and there is still a considerable amount of purchase demand to work through. Those firms may continue to target and receive work.
Downward trend
But what next? The likelihood is that, as this demand filters through and remortgaging begins to reassert itself in the market, the volume operators will begin to take their increased share and the spillover will not exist to the same extent, if at all. That downward trend of firms looks likely to continue.
Of course, we also have to think about the speed of service and the quality of the conveyancing on offer from those that are not doing this every single day or do not have the resource and expertise to be able to handle cases beyond the norm.
Perhaps Q3 2021 will be slightly skewed because again we have the partial stamp duty holiday
Our advice remains for advisers to ask: what is going to be best for the client?
Conveyancing is unlikely to be the temporary priority it has been for the non-volume firms in recent months; and, in a more normalised market without the considerable time pressures a government-induced deadline brings, the volume firms will be able to handle the business and ensure it has the best chance of securing the right completion date.
I know who I would be recommending in those circumstances and, as a result, I expect the number of active conveyancing firms to dip again as the market continues to put its faith in the specialists.
