Conveyancing firms are potentially in brace position as they look to ride out this new period of uncertainty caused by the recent announcement of a snap election on 8 June 2017. This dip in housing transactions isn’t unusual. Industry analysis over several previous general elections shows that a drop in housing transactions is typical.
Perhaps more than any other sector, the demand for conveyancing services tends to fluctuate wildly, often due to the impact of external events. Last year, the Brexit referendum sapped market confidence, resulting in a significant drop in house sales. On the other hand, the government’s announcement of Stamp Duty Land Tax increase and changes in the buy-to-let mortgages from the financial year 2017 led to a surge in house sales in March, before the close of financial year 2016, as home buyers raced to close deals and save themselves the additional tax.
Fundamentally, conveyancing is an 'on demand' service – so when the market conditions are buoyant, conveyancers grow their businesses, undertaking recruitment drives and renting office space to accommodate the upturn. Unfortunately, firms can't stockpile conveyancing transactions for quieter times. The investment and costs undertaken during upbeat times then begin to burden firms in a slow market.
Statistics show that the shock of market fluctuations is felt most acutely by the larger firms who account for the bulk of transactions. Based on 2016 data from The Conveyancing Map, over 75% of all conveyancing in England & Wales is undertaken by the top 1,000 firms. As consolidation continues in the market and firms exit, the share of these larger firms will continue to grow. With business growth also comes operational pressure, which can curb firms’ ability to quickly and effectively react to market fluctuations in order to stay competitive and profitable.
These market fluctuations are tipped to become more acute and the cycles more frequent in the future, given the global economic and political conditions. Conveyancing firms today need to adopt technologies that will enable them to withstand the vagaries of the market and remain viable and profitable at all times.
Conveyancing technologies minimise operational costs, deliver efficiencies and provide the capability to scale up and down with equal ease. By comparison, firms without effective technology must be well staffed during high transaction seasons in order to deliver the best possible customer service to clients – but when the downturn hits, managing staffing levels can be a difficult and painful exercise.
Technology enables conveyancing firms to manage the peaks and troughs in the market. Automation of business-critical workflows across the lifecycle of conveyancing transactions helps keep costs down, ensure compliance, reduce risks and most crucially provide the flexibility and agility to take advantage of changing market conditions. Such technologies make improvement and incremental process efficiencies routine. Firms must consider investment in the very latest conveyancing systems. These are increasingly becoming must have tools for the serious conveyancer. Now is a good time to take stock of the business and plan with the long term in view.
About the Author: Richard Hinton
Richard Hinton founded Pitsford Consulting in 2013, having spent 25 years working in strategic and business development roles in the conveyancing industry. He offers consultancy to a range of legal and technology businesses and has developed a suite of data-driven business tools for conveyancers.
Prior to Pitsford Consulting, he did a 12-year stint as Business Development Director of Shoosmiths solicitors; was Head of Residential Property for Lexis Visualfiles; and held the position of Head of Business Strategy at Searchflow.
He is a founding member of the Conveyancing Association and was part of the team that launched the concept of direct conveyancing in the UK.
Read all Richard Hinton's posts | See all our contributors