Conveyancing delays loom
Knee said some firms will struggle to manage with the anticipated increase in mortgage business next year and warned brokers to expect delays.
He said: “Some firms will be able to manage the increase in business volume which is expected over the next year but some will struggle.
“Conveyancing firms need to grow their resources to stay on track. For some firms this will create a great opportunity to grow their business but others will struggle.
“Should profit motives take hold and firms begin to take on more than they can manage then it could create service difficulties.”
The conveyancing market, as with the rest of the financial services industry, was forced to cut its cloth during the recession and some firms didn’t make it through.
The UK’s largest conveyancing firm, Hammonds Direct, went into administration back in 2009 with the loss of 200 jobs and Knee said its loss had left a gap in the market.
David Gilman, partner at Blacks Solicitors, agreed that there is a gap in the market and said it will be difficult to replace staff that have moved on to pastures new.
He said: “The problem facing the industry is that a lot of firms let conveyancers go during the crash.
“Volumes are increasing and the market is lacking the capacity to deal with it. At Blacks we are currently working on eductation to get people trained up to the appropriate level.
“Delays look likely and I cannot see it getting any better before 2015.”
Knee warned that delays are likely. He said: “The lack of capacity is likely to see delays in the market throughout 2014. It is something we haven’t experienced since before the recession but it is likely to become a feature of the market moving forward.”
But despite the obvious issues with capacity many firms remain reluctant to commit to recruitment drives before the impact of the Mortgage Market Review becomes apparent after April next year.
Knee said: “Many firms are nervous about the potential impact of the MMR.
“There is a real fear that there could be a glitch in the market during the first 3 or 4 months of 2014 as lenders try to clear their pipelines.
“This fear is holding firms back from recruiting, training and investing in staff. Should things take off after the implementation of the MMR this hesitation could cause a real problem in the second half of 2014.”
He advised brokers to work on their relationships as coveyancers now to help mitigate potential delays.
“From a brokers perspective good relationships with solicitors can really help consumers”, Knee said.
“To often clients are left to for their own conveyancing services and more often than not they buy on price alone which can lead to issues with servicing.
“There are lots of organisations set up to provide referrals for brokers and if they aren’t already using one they should be.”