I’ve often written about the state of the conveyancing market in the UK and made the following points: firstly, there are fewer solicitor firms conducting this type of business; secondly, the big specialist firms are if not getting bigger then certainly taking a greater share of business; and finally, as time progresses both these statements will continue to hold true. This is likely to result in far fewer solicitor firms involved in conveyancing and will mean a sustained period of further consolidation in our sector.
Now anyone taking a cursory glance at the latest Land Registry transaction data for February this year may think I’m over-egging the pudding in terms of those statements, especially when you note that, in this shortened month alone, 4,384 individual conveyancers are listed as having conducted transactions of value. This is indeed a sizeable number however it fails to tell the complete story.
For instance the total number of transactions for value by the ‘account customers’ as the conveyancers are known was 58,346 in February. The top 100 firms in this particular list account for 15,478 (26.5%) of those; indeed, the top 10 accounted for 4,731 (8.1%). As previously stated the number of firms conducting this type of business is falling. Consider the same month last year; February 2012 saw 4,447 individual firms listed with 51,101 total transactions; the top 100 accounted for 13,360 (26.1%) and the top 10 accounted for 4,155 (8.1%).
There is some movement in those numbers and they point one way – to a decreasing number of firms (a drop of 63) and the larger specialist operators taking more in terms of market share. The other thing to point out is the number of firms doing the bare minimum of cases in order to appear in the list. In February 2012 808 firms completed just one case; in February 2013 this number was 727. Indeed, in February 2013 just a little less than a half of all firms on the list conducted over five cases. Take those firms doing fewer cases out and we will see further and significant drops in the number of ‘active’ firms in the Land Registry figures.
It seems obvious that the culling of panels by lenders, the overall economic environment and the quality and pricing of the major players in the conveyancing space is having an impact on the ability of non-specialists to continue operating. Some might argue that a firm doing only one conveyancing case a month is hardly relying on conveyancing to make its profit and continue as a going concern – and they would be right. But after the ‘once a month’ brigade have decided it’s not worth their time and effort and/or customers start to realise it is not in their best interest to use these firms, we will see less and less of these operators in the Land Registry data. And, as night follows day, we will see the self-same pressures begin to exert themselves on those who conducted two, three, four and five cases a month this year.
Which all goes to show that the conveyancing sector has become not just ultra-competitive but defined by the needs of those accessing the service – namely lenders, brokers, agents and their customers. The squeezing of local firms by the specialists has been going on for some time and this is being aided by the lenders as they look to ensure they work with those firms who can deliver on quality and volume.
Our advice for brokers is, as always, to ensure they maintain control of the process and ensure the client is not left disappointed. This means using quality specialist firms who do this every hour of every day and can ensure dates are never missed. Our own panel has some of the best operators in the country on it and we continually assess the quality of the work leaving brokers to focus on their clients, safe in the knowledge their conveyancing needs are looked after. In this marketplace there is a lot to be said for peace of mind.
Harpal Singh is managing director of Broker Conveyancing