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Q2 conveyancing transactions broke post-recession records

Average firm's transactions grew eight per cent year-on-year

18 August 2015

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Conveyancing activity broke records between April and June 2015, according to the Conveyancing Market Tracker. Total transactions in England and Wales reached their highest point in any second quarter of the post-recession era.

Volumes among the top five firms grew the fastest of all, at 10 per cent. Conveyancers in this part of the market handled 220 more transactions on average than in Q2 2014. The average conveyancing firm enjoyed an eight per cent year-on-year increase in business during Q2.

"Quarterly growth trends haven't wowed the crowds so far this year, but after the disruption caused by changing mortgage regulations and the general election, conveyancing activity is back within touching distance of the levels seen in the first half of 2014," commented Mark Riddick, chair of Search Acumen, which owns the tracker.

"More importantly, our analysis shows those firms who have got their act together the most in the post-recession era have succeeded in out-performing the market, which has itself grown in leaps and bounds."

He continued: "Mark Carney's latest hints of a possible interest rate rise may bring another boost to transactions as buyers look to expedite property purchases. There is still resounding evidence of pent-up demand: the National Association of Estate Agents suggests there are now ten buyers for every house on the UK market, so housing activity won't stand still for long.

"Conveyancers can look forward to a buoyant second half of the year, but the aggressive growth of those towards the top of the food chain should sound alarm bells for the competition.

"Having the resources to chase more business is only part of the recipe for success. Unless conveyancers have the processes to make best use of their assets and cope with an influx of customers, they will struggle to make the most of opportunities for growth. Those firms who are lagging at the midway point of 2015 and have ambitions to do better will need to think hard about why, and how to turn things round."

Competitive pressures

The tracker uses Land Registry data to assess competitive pressures in the conveyancing market.

Total transactions reached 230,430 between April and June 2015, up from 219,613 during Q2 2014 when the Mortgage Market Review changes contributed to a temporary slowdown of activity.

The relatively strong performance of Q2 2015 has helped the market recover from a slow start to this year. Having been down five per cent year-on-year at the end of Q1, total transactions were down just 0.3 per cent year-on-year by the end of H1.

The analysis suggests the combination of softening house prices and record low mortgage rates has helped to continue the long-term recovery in transaction volumes. Four-year comparisons show activity in Q2 2015 was up by 73 per cent compared with Q2 2011, the year when the market was at its low point following the recession.

Q2 2015 also had the first rise in the number of active conveyancing firms since Q3 2014, as 20 more firms on average registered transactions each month compared with Q1.

But, with fewer businesses competing for work than was the case four years ago, the average firm has seen an even bigger rise in transactions - 95 per cent - over this period.

The top five firms have seen the greatest growth in the last year, but those firms ranking 51st to 100th have recorded the most significant uplift since 2011, with Q2 transaction volumes up by 114 per cent in this part of the market.

Figure 1: Q2 transaction growth rates among top-ranking conveyancing firms

The tracker indicates that dealing applications - including the transfer of titles, charges and notices - continued to make up the bulk of Q2 activity, totalling 201,522 - four per cent more than in Q2 2014. There was also a 46 per cent year-on-year growth in dispositionary first leases to 308 and an 18% growth of transfers in part to 23,409.

Collectively, the top 1,000 firms maintained a 72 per cent market share for the second quarter in succession, down slightly from 73 per cent in Q4 2014 but up from 71 per cent a year ago. This is also significantly more than the 66 per cent market share the top 1,000 firms had in Q2 2011.

Having hit eight per cent in Q4 2014, the market share for the top ten firms dipped slightly from six per cent in Q1 2015 to five per cent in Q2 - the same level recorded in Q2 2014.




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