Search Acumen: Conveyancing market hit seven-year low in March 2020
In March 2020, the conveyancing market saw the number of registered transactions drop to a seven-year low of 55,381, according to the Conveyancing Market Tracker from data and technology business Search Acumen.
This followed an uplift in January, which saw monthly transactions surpass 100,000 for the first time since November 2018.
January’s total of 104,325 transactions registered across England and Wales was the largest since Stamp Duty reform drove registration numbers up to 114,425 in April 2016.
March’s figures showed the lowest monthly total since April 2013 (54,064); this was a 34% drop since March 2019, and a 47% drop over the space of two months.
The number of active conveyancing firms remained relatively constant between Q1 2020 and Q4 2019, increasing from 3,920 to 3,928, although this remained lower than the 3,961 that were active a year earlier.
The number of active firms reached a peak of 4,135 in January 2020, the highest since November 2018 (4,168).
This then fell rapidly to 3,726 in March 2020, the lowest level since records began in Q2 2011, with more than 400 firms not registering a single transaction.
The top 1,000 firms in the market increased their collective market share to 77% in Q1 2020, compared to 71% in Q4 2019.
This share was maintained during the onset of lockdown in March, although combined transaction volumes fell significantly to 42,552, compared with 79,610 in January.
The top five conveyancing firms maintained the same 6% share in Q1 2020 that they enjoyed in the final quarter of 2019, up from 5.5% a year earlier in Q1 2019.
This also remained broadly stable in the face of adverse market conditions, despite total transaction numbers among the top five dropping by 6,353 to 3,310.
Those firms outside the top 1,000 saw their share of the market fall from 25% in Q1 2019 to 23% in Q1 2020, having reached 29% at the end of 2019.
The total number of transactions they completed also fell 13% year-on-year, from 63,558 to 55,402.
For the average conveyancing firm, transactions improved by 4% from 58 in Q4 2019 to 60 in Q1 2020.
However, this was down 7% from 65 at the start of 2019.
In March 2020, the average firm registered just 15 completed transactions – equivalent to a quarterly run rate of 45, which would be the lowest since Q2 2013.
Andy Sommerville, director of Search Acumen, said: “The first quarter of 2020 was a turbulent ride for conveyancers, along with the rest of the nation.
“After high hopes for a year of growth came to a dramatic end.
“The January bounce was followed by a steep drop in transactions and active firms – putting an end to hopes of stability and certainty following the 2019 election.
“While the seven-week freeze on property transactions that began in March is starting to thaw, it is clear expectations have changed and the property industry cannot simply go back to old ways of working.
“The figures for Q2 will look tougher still, but we have been encouraged by the fresh energy and dedication with which many firms have pivoted their services and sought to digitise traditional practices in the face of adversity.
“While parts of the industry had been reluctant to adapt for the 21st century, COVID-19 has been an unwelcome catalyst for change that can bring lasting benefits once the health crisis abates.
“This includes innovations like virtual reality, video viewings and contactless valuations – all bringing greater efficiency to the homebuying process.
“We have long championed the digitisation of the due diligence process and have been focused on helping conveyancers where they can no longer rely on traditional sources of data and information that are crucial to a successful sale or purchase.
“We have been exploring ways to harness all alternative data sources so conveyancers can give clients early and better-informed insights into potential issues.
“This will be crucial to avoid a state of ‘lockjam’ as we move into the next phase of social distancing and seek to get the market back on track.
“The importance of embracing digitisation is no longer a question of debate, but it still requires commitment and collaboration across the industry.
“Government needs to be resolute in its commitment to accessible and accurate data, and work with the private sector to embed an efficient, innovative and productive market – ready to face future crises big or small.”