The conveyancing industry roared into 2018 with its strongest quarter in nearly two years as the industry bounced back after a disappointing end to 2017, the Q1 2018 edition of Search Acumen’s Conveyancing Market Tracker has found.
The total transaction volumes over the three-month period reached 271,546, 12% higher than Q4 2017 (241,666), and the highest number recorded since Q2 2016 (286,485).
This was a strong response after the Q4 2017 Market Tracker which found that, over the whole of 2017, the market saw the first annual drop in transaction volumes in six years.
Andrew Richardson, owner of IFA Conveyancing, said: “We certainly had a very good start to January. I would say our brokers told us in February and March that business wasn’t great but in the last month or so business has been very buoyant.
“I don’t see any reason why it wouldn’t continue and I don’t see anything to suggest it’ll change. In late Spring people tend to put properties on the market and get excited about moving.”
While this big boost in conveyancing activity did not markedly increase the number of active firms in the market (up only 1%), existing firms were able to take on more business.
The average firm processed 64 transactions in Q1, up more than 8% from the 59 in Q1 2017. This resulted in the busiest quarter for conveyancing firms since Q3 2016.
Those firms that only transact between five and 10 cases a month have continued to decline, with their business down 10% since 2014. However those firms that transact between 200 and 500 cases have seen business increase by 50% over the last four years.
Andrew Lloyd, managing director of Search Acumen, said: “It’s great to see that despite a reportedly stagnant housing market and headlines predicting a housing bust, conveyancers have bounced back from a disappointing end to 2017.
“The story of 2017 for the conveyancing market was the continued rise of the challengers – those firms operating just below the biggest conveyancers – and that seems to have continued into 2018.
“It is perhaps the fact that smaller firms can be more nimble to market movements and more quickly embrace technology that has allowed them to take advantage of increasing transactions.
“The larger firms need to ensure they are looking beyond the next quarter and considering what’s next for conveyancing to remain at the top of the pack.”
In Q1 2018, the top five ranking conveyancing firms continued to see pressure growing from the challengers beneath them.
Activity levels among the top five ranking firms increased 9% year-on-year, but it was the firms between 51st and 100th who realised the strongest gains in the market, with activity up 16% since Q1 2017.
Comparing different types of transactions, Transfer of Part transactions shot up 57% quarter-on-quarter (26,120 to 41,101), and 25% year-on-year (from 32,999).
First Registrations saw the biggest annual jump in activity, up 40% on last year’s figures (from 5,658 to 7,895).
Meanwhile, the only category to suffer a drop in volumes compared with Q1 2017 was Dispositionary First Lease, which dropped 16% (from 911 to 768).
Lloyd added: “We’re seeing very volatile movements in the market quarter-to-quarter. The first quarter has brightened which is great and early indicators are pointing to it going to continue into the next quarter.
We’re almost living quarter by quarter by confidence.
“More generally, with a dearth of new entrants to the market, it’s been the job of all conveyancers to do more with less, and they are seemingly up to that challenge.
“But, if these trends persist, firms must ensure they operate with absolute efficiency and embrace technology to create a transparent, productive proposition that can help conveyancers offer their clients more.
“Regardless of a strong start to the year, we are still of the opinion that 2018 will be full of challenges for conveyancers while the housing market continues to stumble along.
“We all look to the government to find ways to free up the housing market and create more stock, but it’s down to us to ensure the conveyancing market effectively adapts to the future landscape of property transactions.”