With the clocks now having ‘sprung forward’ there’s no doubting that winter is over and therefore, if tradition tells us anything, it’s now the time of year when property activity improves and transaction levels tend to increase. Of course, most other years have not had the MMR to contend with and so, while I fully anticipate the customary spring bounce, it remains to be seen just how high the market will jump.
Of course a rise in transactions may not always be good news for all, especially if you are a solicitor firm conducting conveyancing activity and already struggling to cope. It’s been said many times before, but it is worth repeating, that to say some (particularly smaller) conveyancing firms are having resource issues at present would be something of an understatement.
Indeed, one might say that throughout the property transaction process there are ‘resource issues’ to be overcome. It’s not just that there are a finite number of conveyancing solicitors to choose from but the same is true for underwriters, surveyors and effectively any professional base which was eroded by the post-credit crunch/recessionary period. And we should not forget, certainly when it comes to the professions highlighted above, that they are not always the most lucrative careers to pursue.
The point of this is that, despite recruiting heavily, most conveyancing firms are fishing in a limited pool and they are not always able to get the catch that they want. Therefore, in a growing marketplace, something’s got to give and, perhaps inevitably, in conveyancing it is fee levels which are on the up.
There are a number of reasons for this. Firstly, fees have been incredibly low for many years and we shouldn’t begrudge solicitors from upping their margin in such times. Secondly, it’s back to the resource/recruitment issue. More business brings with it more competition and/or more need for resource for existing firms – good quality people are wanted and needed, and therefore firms are either having to pay more to get their staff or they having to match offered wages in order to keep them.
We have all heard of some of the larger conveyancing firms opening new large-scale offices in areas of the country where there are already significant numbers of solicitors. It reminds me of the time pre-credit crunch when we had a spate of specialist lenders launching into the marketplace all requiring the normal range of lending staff in order to operate. Those who had experience were either being tempted by significant pay/benefit packages to jump ship to a new lender or were using their cache as an in-demand employee to secure better terms at their existing employment. It is the nature of the business beast – however we will not reflect too much on which of those lenders are still operating today.
The fact of life in conveyancing at present is that clients are going to be paying more for their legal services in order for firms to keep recruiting and conducting business – now while some might baulk at this I think it may work in the client’s favour. If service and quality standards increase as a result of clients having to pay £20/£30 more for their conveyancing then it’s perhaps not a bad hand to be dealt. Indeed, given the cut in Land Registry fees which took place earlier this month, clients are not going to be out of pocket overall and (hopefully) they will also be receiving a better service. Perhaps that’s another reason to be thankful that spring is finally here.
Harpal Singh is managing director of BrokerConveyancing.co.uk
