Small firms take advantage of record rise in conveyancing

Despite pre-Brexit fears, the property market has boomed amid SDLT changes

Property transactions in Q2 grew by almost a quarter year-on-year as buyers raced to beat changes to stamp duty land tax (SDLT), new research has found.

The increase in SDLT by at least 3 per cent on buy-to-let properties and second homes on 1 April saw completions rise from 230,430 to 286,425.

In a record-breaking April, transactions soared 26 per cent to 114,425 from 90,476 in March - the highest since monthly records began in 2011. The largest number of businesses responsible for completed transactions at Land Registry in any month was also recorded since September 2014.

Despite a calmer market and the impending EU referendum, both May and June also saw year-on-year rises of 14 per cent with firms completing 81,583 and 90,477 transactions respectively, allaying any pre-Brexit fears that the market would stall.

Completions recorded in Q2 of 2016 were 30 per cent higher than two years ago and 59 per cent higher than in 2013.

Mark Riddick, chairman of Search Acumen said: 'Our analysis shows the conveyancing industry has been tried and tested in recent months, and the pressure shows no sign of easing as our country begins to work out what comes next.

'The Q2 data confirms the rollercoaster quarter that many forecasted, with the residual effect of April's stamp duty changes causing the highest level of completed activity the industry has seen since 2014. Since then, the Brexit outcome has painted an uncertain picture for the future of the property market.

Search Acumen's tracker, which uses Land Registry data to examine competitive pressures in the conveyancing market per month, showed that seven firms occupied the top five spots for transactions during Q2.

My Home Move Limited registered the most transactions while O'Neill Patient, Countrywide Property Lawyers, Birchall Blackburn, Bower & Bailey, Knights Professional Services Ltd, and Beaumont Legal also featured.

Completed activity rose 17 per cent over the quarter and 41 per cent over the year to reach an average of 3,523 transactions per firm over the three month period.

Outside the leading firms, the most significant quarterly growth was seen among firms ranked outside the top 500 where average volume of transactions rose by 5 per cent on Q1.

Year-on-year, those firms ranked 501st to 1,000th experienced 23 per cent growth while those outside the top 1,000 recorded a 19 per cent rise.

Riddick explained that the rise in market share and an increasing number of transactions for larger firms will put the pressure on the middle market and challenger firms to compete in a growing market.

The tracker also revealed a fall of 6 per cent in first registrations since Q2 2015, which Riddick attributed to a 'bigger underlying problem in the housebuilding sector'.

'While the Bank of England rate cut [from 0.5 per cent to 0.25 per cent] will do its bit to reignite the appeal of home buying, house builders must increase output in order to hit the government's one million homes target.

'With stability will come confidence, and as our political and economic future becomes more certain, the next few months look more positive as provisions are put in place for a more stable Q3.'

Matthew Rogers is a legal reporter at Solicitors Journal @sportslawmatt matthew.rogers@solicitorsjournal.co.uk