Consolidation of conveyancing market continues at pace

The total number of conveyancing firms operating in the market declined at the fastest rate in three years during 2015, new research has found.

The Conveyancing Market Tracker from Search Acumen has revealed that the number of active firms who recorded transactions dropped by 9 per cent from 5,871 to 5,357 in 2015, three times the annual rate of decline seen in 2013 and 2014.

With mergers and exits plentiful in 2015, over 500 firms were victims of the drop. Since transactions were first recorded in 2005, the number of firms operating in the conveyancing market is believed to have reduced by 30 per cent.

The decline led to an average of 192 transactions being recorded by firms last year, 10 per cent above 175 in 2014, notwithstanding the number of deals increasing by just 0.4 per cent on 2014.

However, while the average firm operating in the market appeared to benefit from a smaller number of competing firms, the 10 per cent annual gains are the lowest seen in four years.

The market share of the top 1,000 ranking firms grew by one point in 2015, beating the 70 per cent share secured a year earlier and the highest since records began in 2005.

Mark Riddick, chairman of Search Acumen commented: 'The average firm saw its transaction volumes grow at the slowest rate since 2012. This was the year when the property market was still coming out of the post-recession doldrums - and therefore a very low benchmark.

'Growth in the upper echelons was also muted despite the top 1,000 gaining market share.'

Direct enquiries and personal referrals were the most common source of business growth during 2015, with 70 per cent of firms reporting a rise in business from this channel.

The second most common source was introducer relationships, with 40 per cent of firms reporting increased business from this source versus just 4 per cent reporting less business.

Meanwhile, estate agents were a source of business growth for 37 per cent of firms, but 14 per cent reported a decrease from this channel.

With conveyancers looking to achieve further growth in 2016, nearly three in four firms say staff recruitment and training is the biggest challenge to overcome.

Riddick said the importance of referrals and direct enquiries as a source of new business should help to focus minds on the priorities for 2016.

'There is no room for a laid-back expectation that introducer-driven guaranteed business from sources like estate agents will simply keep coming through the door.

'The more that firms can do to meet and exceed expectations with the service to existing clients, the better chance they have of benefiting from this trend.'