The UK conveyancing market in 2024
The conveyancing market faced significant challenges in 2023, with transaction volumes dropping and interest rates rising. What does this mean for conveyancers, and what opportunities lie ahead? A new report from Access Legal has the answers
Transaction volumes in 2023 saw a notable decline compared to the previous year, which had already experienced a drop from the peak in 2021 due to the end of the stamp-duty holiday. This decline occurred amid challenging economic conditions, including high inflation and interest rates, and a slowdown in house price growth.
The legal market also saw changes. The number of active conveyancing firms decreased by 9% compared to 2022, with a notable shift in firm profiles. Firms completing fewer than 100 transactions increased slightly, while those completing more than 100 saw a sharp decline. Specifically, the number of firms handling 101-500 cases fell by 13%, those handling 501-1500 cases dropped by 29%, and firms handling over 1500 cases plummeted by 35%. This has led to a significant polarisation in the market, with the largest firms dominating.
Economic context
The economic backdrop of 2023 was marked by inflation rates not seen in decades, coupled with rising interest rates. These factors contributed to a cooling housing market, with house price growth slowing and eventually prices decreasing. The combination of these economic pressures created a challenging environment for both buyers and sellers, impacting the overall volume of transactions.
Impact on conveyancing firms
The reduction in transaction volumes had a direct impact on conveyancing firms. The decrease in the number of active firms was seen across all regions in England and Wales. However, the impact varied depending on the size of the firm. Smaller firms, completing fewer than 100 transactions, saw a slight increase, possibly due to their ability to adapt more quickly to changing market conditions. In contrast, larger firms, particularly those completing more than 1500 transactions, experienced a significant decline, highlighting the challenges faced by high-volume conveyancers in a contracting market.
Client experience
Despite the drop in transaction volumes, efficiency levels improved, with post-completion work completed a week earlier on average. However, complaints to the Legal Ombudsman increased, primarily due to poor communication and delays. Research by Conveyancing Week found that while home-movers were generally satisfied with their conveyancing experience, they felt the process could be quicker and communication better. Around 20% of clients expressed a desire for more digital processes, such as online case access and mobile apps.
Technological advancements
The desire for more digital processes among clients highlights the growing importance of technology in the conveyancing sector. Adoption of digital tools can streamline the conveyancing process, making it more efficient and transparent. Online case management systems, electronic document signing and mobile apps can enhance client satisfaction by providing real-time updates and reducing need for physical meetings.
Compliance burdens
The conveyancing sector also faced increased compliance burdens, with heightened scrutiny from regulators regarding anti-money laundering, increased fining powers, and new regulations like the Building Safety Act and Climate Change Guidance. These regulatory changes require conveyancing firms to stay updated and ensure compliance, adding to their operational challenges.
Opportunities for innovation
Despite the challenges, there are opportunities for innovation in the conveyancing market. Firms that embrace technology and adapt to changing client expectations can differentiate themselves in a competitive market. Investing in digital tools, improving communication channels, and enhancing overall client experience can help conveyancing firms thrive in a challenging environment.
The conveyancing market in 2024 presents both challenges and opportunities. Firms that can navigate the economic pressures, adapt to regulatory changes, and leverage technology to improve client experience will be well-positioned for success. For a detailed analysis and regional performance profiles, download the full report for free.
