Conveyancers' optimism cools as housing market slows down

The property market continues to cool as conveyancers report a slowdown in business, according to a new survey by a conveyancing search provider.

Conveyancing search provider SearchFlow polled 84 conveyancers across England and Wales between October and December 2014 and found that 43 per cent of business volumes had stayed the same.

In particular, the survey found that less than a third of respondents saw work volumes increase by more than 10 per cent, down from 43 per cent reported in the preceding quarter.

The news from the conveyancing sector comes hot on the heels of the publication of Nationwide's House Price Index in December 2014. The index reported a slowdown in property price growth, a further indicator the market is slowing.

Almost one quarter of conveyancers attribute the cooling in the market to the Mortgage Market Review, while only 16 per cent attributed it to concerns over forthcoming interest rate rises.

"It is clear that conveyancers are less optimistic than they were at the start of 2014," explained SearchFlow's managing director, John Pickford. "But, with the sharp spike in the market in early 2014, it was to be expected that we would eventually come to see the market level out again.

"We've already seen the impact of mortgage reviews, but continued uncertainty on interest rate changes and the upcoming election could cause further instability in the market. We're also yet to see what affect stamp duty reforms will have. These are all key issues that we'll continue to monitor closely in 2015."

The research also suggests more conveyancers are pessimistic about prospects for business growth. Just 17 per cent expect additional business in Q1, compared with 29 per cent when asked the same question in the preceding quarter.

This is reflected in conveyancers' recruitment habits, which have continued to decline. Only one in five of the respondents said they were 'very likely' to increase their headcount, down from one in three in the preceding quarter.

The findings also suggest that lender panels remain the most significant industry concern, with 35 per cent of conveyancers citing this as their main worry, compared with a half in the preceding quarter. However, the survey also shows lender panel instructions are continuing to rise at 15 per cent in the current quarter.

When considering their own businesses, almost half of conveyancers cite profitability as the main concern for 2015, while 36 per cent are more worried about client satisfaction and retention. Thirty per cent of those polled will be focussing on investment in people, while a quarter will be looking to new technology this year.

"Client satisfaction is crucial for conveyancers to ensure they attract new business, as well as retain existing business," Pickford continues. "Lawyers are urged to use this time of calm to consolidate their operations and ensure they have in place the most efficient process and business practices to maximise profitability."

John van der Luit-Drummond is legal reporter for Solicitors Journal