The property market has been on something of a rollercoaster ride over the last few years. The fortunes of conveyancers, those involved in the legal transfer of property from one person to another, are, of course, inextricably linked with that market. In these current economically challenging times, what does the future hold for the conveyancing industry and why might conveyancers be anxious?
An expected downturn in the property market
Much of the conveyancing industry’s anxiety for the future comes from warnings that a property market crash is expected soon, although nobody knows exactly when. Currently, the cost of living crisis and the increase in the Bank of England base rate has not had a significant impact on the property market. But that is expected to change in the future. Figures show some signs of decline are already beginning to emerge. House prices dropped by 0.9% in October for the first time since July 2021, while approvals for purchases fell to 66,800 in September 2022, compared with more than 74,300 in August 2022, recent figures show.
Cuts to stamp duty announced in the autumn budget and expected to be in place until 2025 have been introduced in a bid to stave off, or at the very least minimise, a housing market crash. What impact this will have on conveyancing remains to be seen but the uncertainty it creates is a cause for concern in the industry. It is logical to expect a crash in the property market will result in a reduction in transactions for conveyancers. Add to this the fact that the Government’s Help to Buy scheme is ending in 2023. Some conveyancers such as Sam Conveyancing offer conveyancing services that include Help to Buy loan repayment advice and more. As such, there will likely be a downturn in activity for conveyancers within this field too.
However, the industry is still very buoyant following one of one of its busiest ever periods. The stamp duty holiday introduced during the Covid 19 pandemic sparked an increase in house purchases, resulting in unprecedented caseloads for conveyancers. Conveyancers may also be worried as to how the current mortgage rate crisis will impact the length of the conveyancing process too. It is expected that the huge hike in mortgage rates coupled with the cost of living crisis will cause more property transactions to fall through at the last minute or could make the entire conveyancing process longer and more drawn out.
Reasons to be optimistic for the future
While the future that lies ahead is an uncertain one within the shorter-term housing market, there are reasons to be optimistic. The recommitment to cutting stamp duty outlined in the autumn budget is expected to help encourage some buyers. A downturn in new instructions may well give conveyancers time to ‘catch up’ after an incredibly busy few years and will allow firms to work through their current high caseloads. It may also make conveyancers more eager and diligent to get cases over the line. Wiser conveyancers will use any market downturn and subsequent fall in instructions as time to refine their business processes and to review technologies to ensure customers are getting the best service possible. Innovations such as E-conveyancing are expected to become more common in the future too, with more firms adopting the practice.